Abstract: A novel approximative iteration technique-local iteration, is combined into two-dimensional Multilevel Fast Inhomogeneous Plane Wave Algorithm (MLFIPWA), namely Local MLFIPWA (LMLFIPWA), to solve 2D electromagnetic scattering problem efficiently. The computational complexity of MLFIPWA is the same as the multilevel fast multipole algorithm, so it can be used to solve large-scale problems. Since the Green's function is based on Sommerfeld integration, the MLFIPWA has the advantage of being directly expanded into layered medium problems. By applying a local iteration procedure, the efficiency can be further improved. Numerical results demonstrate the validity of this method.