The close displacement of ultra high frequency radio-frequency identification (UHF RFID) tags can be considered as an electromagnetically interconnected system which causes the mutual coupling effect among antennas of tags, thereby resulting in change in impedance matching condition. Based on the principles of RFID technology and Friis propagation equation, a link budget model of UHF RFID is provided which consists of one reader and one tag. Expressions of mutual impedance in dense environments are derived by using a two-port network. Utilizing the parameters of power transmission coefficient and modulation factor, the variation of system performance is discussed in theory and tested by three experiments which are conducted in open indoor environment. The measurement results show that the change rate of minimum power transmitted by the reader antenna is in a range from -7% to 11.6% for two-tag scene and from -10% to 12.5% for two-plane arrangement.