Managing location information of mobile terminals is an important issue in mobile computing systems. The IS-41 and the GSM schemes are inefficient in the following situations: (1) mobile terminals frequently move to neighboring registration area, (2) frequently communicate with mobile terminals that reside at neighboring registration area. In this paper, we propose a new location management scheme that solves these problems. We compare the performance of the our scheme with that of the IS-41 scheme in respect of communication cost, database cost, and total cost. Simulation results show that the proposed scheme performs better than the IS-41 scheme.