We present MUSE (MUtation-baSEd fault localization technique), a new fault localization technique based on mutation analysis. A key idea of MUSE is to identify a faulty statement by utilizing different characteristics of two groups of mutants-one that mutates a faulty statement and the other that mutates a correct statement. We also propose a new evaluation metric for fault localization techniques based on information theory, called Locality Information Loss (LIL): it can measure the aptitude of a localization technique for automated fault repair systems as well as human debuggers. The empirical evaluation using 14 faulty versions of the five real-world programs shows that MUSE localizes a fault after reviewing 7.4 statements on average, which is about 25 times more precise than the state-of-the-art SBFL technique Op2.