The frequency diverse array (FDA) has drawn substantial attention because it provides a new degree of freedom. However, the multitarget localization is fundamentally limited by the range-angle-coupled and range-periodic beampattern of the basic FDA. It has been suggested to design a special FDA configuration to localize targets, but seldom of the existing works consider the design both in transmitting and receiving. In this paper, a transmit–receive system of FDA radar is proposed for the multitarget localization. In order to decouple the beampattern in the range and angle domains, the configurations of subarray-based FDA (SB-FDA) and full-band FDA (FB-FDA) are chosen as transmitter and receiver, respectively. In such a system framework, the receive beamwidth in range domain is only a quarter of the transmission. Then, two typical multitarget scenarios, sparse targets and unresolved targets, are both considered in the multitarget localization. For sparse targets, a proper frequency increment is selected to control the range-periodic transmit and receive mainlobes to focus on a single target, besides being staggered with others. In this way, multitarget localization is achieved in different pulses with monopulse processing. For unresolved targets, a method of intra-pulse beam scanning is proposed to localize each target with little interference from others. We also analyze the system performance in Cramér-Rao lower bound (CRLB) of localization and output signal to interference-plus-noise ratio (SINR). Several simulation results demonstrate the effectiveness of the proposed transmit–receive system in multitarget localization.