Proxy Mobile IPv6 (PMIPv6) is designed not only to avoid tunneling overhead over the air but also to manage the mobility of hosts that are not equipped with any mobility management software. However, PMIPv6 leads to increasing signaling cost as mobile nodes move frequently because the protocol is based on the global mobility management protocol. In this letter we propose Localized PMIPv6 with Route Optimization (LPMIPv6-RO). Our numerical analysis shows that the proposed scheme outperforms previously proposed mobility protocols in terms of both signaling and packet delivery cost.