Leakage reduction in water supply systems and distribution networks has been an increasingly important issue in the water industry since leaks and ruptures result in major physical and economic losses. Hydraulic transient solvers can be used in the system operational diagnosis, namely for leak detection purposes, due to their capability to describe the dynamic behaviour of the systems and to provide substantial amounts of data. In this research work, the association of hydraulic transient analysis with an optimisation model, through inverse transient analysis (ITA), has been used for leak detection and its location in an experimental facility containing PVC pipes. Observed transient pressure data have been used for testing ITA. A key factor for the success of the leak detection technique used is the accurate calibration of the transient solver, namely adequate boundary conditions and the description of energy dissipation effects since PVC pipes are characterised by a viscoelastic mechanical response. Results have shown that leaks were located with an accuracy between 4–15% of the total length of the pipeline, depending on the discretisation of the system model.