The aim of this research work was to develop an Acoustic Emission (AE) source location method suitable for Structural Health Monitoring (SHM) of composite aircraft structures. Therefore useful key signal features and sensor configurations were identified and the proposed method was validated using both artificially generated AE as well as actual AE resulting from damage. Acoustic Emission is a phenomenon where waves are generated in stressed materials. These waves travel through the material and can be detected with suitable sensors on the surface of the structure. These stress waves are attributed to propagating damage inside the material and can be monitored while the structure is in service. This makes AE very suitable for SHM, in particular for aircraft structures. In recent years composite materials such as carbon fibre reinforced epoxy (CFRP) are increasingly being used for primary and secondary structures in aircraft. The anisotropic layup of CFRP can lead to different failure mechanisms such as delamination, matrix cracking or fibre breakage which affects the remaining life time of the structure to different extents. Accurate damage location is important for SHM systems to avoid further inspections and allows for a maintenance scheme which considers the severity of the damage, due to damage type, extent and location. This thesis presents a novel source location method which uses a small triangular AE sensor array. The method determines the origin of an AE wave by a combination of time of arrival and modal analysis. The small footprint of the array allows for a fast and easy installation in hard-to-reach areas. The possibility to locate damage outside and at a relatively far distance from the array could potentially reduce the overall number of sensors needed to monitor a structure. Important wave characteristics and wave propagation in particular in CFRP were investigated using AE simulated by an artificial source and actual damage in composite specimens.