The impact of leakage was incorporated into the transfer functions of the complex head and discharge. The impedance transfer functions for the various leaking pipeline systems were also derived. Hydraulic transients could be efficiently analyzed by the developed method. The simulation of normalized pressure variation using the method of characteristics and the impulse response method shows good agreement to the condition of turbulent flow. The leak calibration could be performed by incorporation of the impulse response method with Genetic Algorithm (GA) and Harmony Search (HS). The objective functions for the leakage detection can be made using the pressure-head response at the valve, or the pressure-head or the flow response at a certain point of the pipeline located upstream from the valve. The proposed method is not constrained by the Courant number to control the numerical dissipation of the method of characteristics. The limitations associated with the discreteness of the pipeline system in the inverse transient analysis can be neglected in the proposed method.