Water distribution systems are made up of many interdependent elements that enable water supply to meet a demand that is variable in time and space. One of the main concerns for utility managers is quickly locating and repairing a leak after detection, during regular network water balance. This paper presents a two-stage methodology for locating a leak that is based on the hydraulic model of the network, and, particularly, on the conservation equations that govern network behaviour. In the first stage, the sensitivity of each element (nodes and pipes) is obtained for a given demand increase in any node. In the second stage, that sensitivity is combined with additional real data provided by the (possibly) existing pressure sensors and flow meters installed throughout the network. As a final result, the system of equations thus obtained produces the theoretical leak flow at each network node that matches the network conditions. A subsequent analysis of the leak flows obtained highlights the node or nodes in which the leak is occurring. The presented methodology is applied and assessed in a case study.