In order to solve the problem that it is difficult to extract the characteristic frequency and identify the location of the gear crack damage in planetary gearboxes, a gear local damage diagnosis method based on ensemble empirical mode decomposition (EEMD) and frequency demodulation analysis is put forward. Based on the vibration signal model of typical gear local damages, the method can process vibration signals of the sun, ring and planet gear with crack damage by EEMD and frequency demodulation analysis. The local damage characteristic frequency of the gear is extracted from the frequency spectrum, and the location of the gear with crack damage in the gearbox is identified. Simulation analysis and experimental results show that the method based on EEMD and frequency demodulation analysis can effectively extract the characteristic frequency from the sun, ring and planet gear with crack damage. Besides, the damage localization of the gear with crack damage in the planetary gearbox is completed.