This study proposes an augmented reality (AR)-assisted workpiece-localization technique for rod-type flexible fixtures used in automotive and aerospace industries, for machining thin-walled components. The machining accuracy of a component depends considerably on the profile error and envelopment condition of the blank workpiece. An AR virtual reference of the component is created in the image space using a pinhole camera with a lens distortion model that visually assists the rough placement of the workpiece at the desired location. The fine workpiece-localization process is formulated as a nonlinear optimization problem to minimize the profile error. The problem is subjected to a point-in-polygon constraint in the image space to guarantee the envelopment requirement. The proposed method is validated using an aircraft body panel. It uses only the measurement data acquired from the upper surface of the panel and the AR reference and is a more flexible and accurate solution than the locating-pin method.