The oscillatory flows in pipeline systems due to excitation by valve operation are efficiently analyzed by the impulse response method. The impact of leakage is incorporated into the transfer functions of the complex head and discharge. Frequency-dependent friction is used to consider the impact of unsteady friction for laminar condition. Extensive development of the impulse response method was made by considering the sources of friction associated with the local and convective acceleration of velocity for turbulent flow. The genetic algorithm was integrated into the impulse response method to calibrate the location and the quantity of leakage. The calibration function for leakage detection can be made using the pressure-head response at the valve, or the pressure-head and flow response at the section upstream from the valve. The proposed leak detection algorithm shows the potentials for being applied to a simple pipeline system with a single leak or multiple leaks.