Axle box bearing is a key rotating component in the bogie of high-speed trains. Under complex wheel/rail excitations, localized defects caused by fatigue, overload, etc. will threaten the operation safety of railway vehicles. In this paper, a coupled dynamic model of axle box bearing-flexible axle box-vehicle system with different bearing localized defects is established using UM/Simulation cosimulation. The vibration responses of axle box with fault on outer raceway, inner raceway and roller under track irregularities and wheel ovalization are studied. In addition, the fault responses from typical points of axle box and rotary arm are compared to select the optimal mounting position of accelerometer on the axle box. The simulated results are helpful to the condition monitoring and fault diagnosis of axle box bearings in industrial applications.