Little work has been done on the localization of microcracks in bone using acoustic emission. Microcrack localization is useful to study the fracture process in bone and to prevent fractures in patients. Locating microcracks that occur before fracture allows one to predict where fracture will occur if continued stress is applied to the bone. Two source location algorithms were developed to locate microcracks on rectangular bovine bone samples. The first algorithm uses a constant velocity approach which has some difficulty dealing with the anisotropic nature of bone. However, the second algorithm uses an iterative technique to estimate the correct velocity for the acoustic emission source location being located. In tests with simulated microcracks, the constant velocity algorithm achieves a median error of 1.78 mm (IQR 1.51 mm) and the variable velocity algorithm improves this to a median error of 0.70 mm (IQR 0.79 mm). An experiment in which the bone samples were loaded in a three point bend test until they fractured showed a good correlation between the computed location of detected microcracks and where the final fracture occurred. Microcracks can be located on bovine bone samples using acoustic emission with good accuracy and precision.