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Particle swarm optimization (PSO) algorithm is one of embranchments of swarm intelligence. The algorithm is a random searching algorithm in nature. It can converge to the global minima more probability and be adept in continuous function optimization. In this paper, partial discharge (PD) localization in power transformer is discussed. The partial discharge source localization by ultrasonic measuring in a power transformer is studied by the particle swarm optimization, and the signal parameter estimated model of ultrasonic localization has been established based on the propagation properties of the ultrasonic wave. Experiment results have shown that PSO algorithm possesses high calculation efficiency and high convergence speed, and can efficiently prevent the result from falling into the localized optimum.