This review aims at showing how the location of acoustic emission (AE) in loaded polymer composites can be used to get a deeper insight into the onset and growth of damage, and associated failure events and sequences. Different location methods (experimental and theoretical) are briefly introduced along with AE characteristics in time and frequency domains. Linear (1D), planar (2D), and spatial (3D) locations of AE are examined through selected examples. The cited works demonstrate the versatile use of AE. Apart from damage and failure assessment, AE can be used to reconstruct crack growth, and thereby help determine the accurate fracture mechanical parameters. Unlike the detection of the development of damage, the identification of failure mechanisms by analyzing selected AE signal parameters, including their clustering, requires further research. Unraveling the failure mode is, however, a key topic with respect to structural integrity, residual strength, and lifespan expectation of composite parts. A recent major challenge is to establish a reliable, real-time structural health monitoring system making use of located AE events monitored by built-in sensors.