Aluminum alloy 7075-T6 is a commonly used material in aircraft industry. A crack usually initiates at the edge of a fastener hole, and it can affect the maintenance schedule and reduce the life of an aircraft structure significantly. The fatigue property of the material has been researched widely to develop methods and models for predicting fatigue crack growth under random loading. From the point of damage tolerance design, the inspection technique of a crack for an aircraft structure is very important because it can be used to determine the inspection period of the aircraft structure. The acoustic emission (AE) technique is a nondestructive testing (NDT) method that is able to monitor damage initiation and progression in real time. Understanding the early stage of AE signature due to the damage progression using small scale laboratory samples requires non-traditional data analysis approaches. In this study, 1mm thick Al-7075-T6 plates were tested under monotonic and fatigue loading. The initiation of damage progression using AE data was identified based on improved linear location algorithm and the result was verified using elasto-plastic finite element model. The improved location algorithm integrates dispersive characteristics of flexural waves and threshold independent approach to pick up the wave arrival time. In this paper, AE results in comparison with FE model under monotonic and fatigue loading will be presented. The comparison of traditional and improved location approaches will be shown. The approach for implementing the laboratory scale results in the large scale field testing will be discussed.© (2011) COPYRIGHT Society of Photo-Optical Instrumentation Engineers (SPIE). Downloading of the abstract is permitted for personal use only.