Malfunctioning anchors in location-aware wireless networks may produce ranging outliers and result in localization failure. In this letter, we propose a performance limit for TOA-based localization with malfunctioning anchors. An approximated Cramér-Rao lower bound (CRLB) in closed form is derived. Building on this, the relationship among localization accuracy, anchor's malfunctioning probability, ranging error of wellfunctioning anchors, and the maximum communication range are analyzed. Finally, numerical results verify the proposed CRLB and corroborate our analysis.Index Terms-Cramér-Rao lower bound (CRLB), ranging outlier, location-aware wireless network.