Engineered wood or mass timber has gained increasing popularity in building construction, and layered engineered wood is a major category of mass timber design since it enables manufacturing structural members with a wide range of geometry. Thus, there is a potential rising demand for structural health monitoring on engineered wood-based structural members and buildings. This study investigates the feasibility of using an important and practical acoustic emission (AE) method for damage localization, specifically two-dimensional (2D) AE source localization, in a representative layered engineered wood sample, namely laminated veneer lumber (LVL) plate. While 2D AE source localization is generally straightforward in isotropic materials, the problem becomes challenging for anisotropic materials with angle-dependent wave velocities. It is even more complicated if heterogeneity involves, which turns out to be the case for layered engineered wood. In this study, we rely on the AE feature of difference in time of arrival (dTOA) and develop three methods to address the challenges of 2D AE source localization raised by anisotropy and heterogeneity in an LVL plate. The benchmark velocity profile method (VPM) is first implemented in an LVL plate. With knowledge of the angle-dependent velocity, the source location predictions by the VPM are generally erroneous even with predicted source location outside of the region of interest. Furthermore, the general regression neural network (GRNN) is developed using different combinations of dTOA components, resulting in improved prediction performance. Third, the Gaussian process regression (GPR) is developed by maximizing the marginal likelihood of the training dataset. Moreover, to lessen the computation burden, the lower bound of the logarithm likelihood of the whole models is derived and decomposed through Jensen’s inequality and Bayes’ theorem, providing the theoretical background for training models with different combinations of dTOAs individually.