Abstract: Negative pressure wave methods for leak location were based only on experimental studies. The finite element method was researched in this paper. Firstly, the two-dimensional model of leak pipe was established by using the finite element analysis software FLUENT. The steady-state case of gas flow was simulated. Secondly, previous data were used as the initial value of unsteady simulation. The pre-set location of leak was opened and the pressure signal was monitored. The negative pressure wave localization formula was improved by numerical simulation. Wavelet analysis was chosen to remove noise. Lastly, neighborhood difference method was used to find the pressure dump point and determine the location of leak.