Summary The precise localization of cable damage is a major issue in bridge engineering. The acoustic emission (AE) method has been applied to detect defects for cable structures in bridges. In this paper, an AE localization method is proposed to localize both lateral and longitudinal positions of defects in a parallel steel wire bundle composed of seven steel wires. The proposed method is verified numerically and experimentally. Tension failure test of the parallel steel wire bundle composed of seven wires was carried out, and the precise localization of defects was realized by through modal AE techniques and the analysis of the characteristics of AE signal. A Multiphysics model based on COMSOL was established to facilitate the visualization of stimulated AE propagated in the parallel wire bundle. The propagation mechanism of AE signal was studied, and the feasibility of localization method was verified.