Partial discharge (PD) in power transformers is one of the prime reasons resulting in insulation degradation and power faults. Hence, it is of great importance to study the techniques of the detection and localization of PD in theory and practice. The detection and localization of PD employing acoustic emission (AE) techniques, as a kind of non-destructive testing, plus due to the advantages of powerful capability of locating and high precision, have been paid more and more attention. The localization algorithm is the key factor to decide the localization accuracy in AE localization of PD. Many kinds of localization algorithms exist for the PD source localization adopting AE techniques including intelligent and non-intelligent algorithms. However, the existed algorithms possess some defects such as the premature convergence phenomenon, poor local optimization ability and unsuitability for the field applications. To overcome the poor local optimization ability and easily caused premature convergence phenomenon of the fundamental genetic algorithm (GA), a new kind of improved GA is proposed, namely the sequence quadratic programming-genetic algorithm (SQP-GA). For the hybrid optimization algorithm, SQP-GA, the sequence quadratic programming (SQP) algorithm which is used as a basic operator is integrated into the fundamental GA, so the local searching ability of the fundamental GA is improved effectively and the premature convergence phenomenon is overcome. Experimental results of the numerical simulations of benchmark functions show that the hybrid optimization algorithm, SQP-GA, is better than the fundamental GA in the convergence speed and optimization precision, and the proposed algorithm in this paper has outstanding optimization effect. At the same time, the presented SQP-GA in the paper is applied to solve the ultrasonic localization problem of PD in transformers, then the ultrasonic localization method of PD in transformers based on the SQP-GA is proposed. And localization results based on the SQP-GA are compared with some algorithms such as the GA, some other intelligent and non-intelligent algorithms. The results of calculating examples both stimulated and spot experiments demonstrate that the localization method based on the SQP-GA can effectively prevent the results from getting trapped into the local optimum values, and the localization method is of great feasibility and very suitable for the field applications, and the precision of localization is enhanced, and the effectiveness of localization is ideal and satisfactory.