Gravitational energy is localized. It is shown that the massless gravitational energy is enclosed in space, which is curved by matter, according to Einstein's theory. This solves the problem of the unambiguous localization of gravitational energy, a problem that Einstein left to the mercy of fate. Depending on the nature of the curvature of space, this energy can be positive (gravitational waves) or negative (Schwarzschild space). The density of the space’s energy is obtained. The emission of massless gravitational waves reduces the inertial mass of the emitter. In the Schwarzschild case, the receipt of the gravitational energy from the space by matter increases the inertial mass of the matter. Since the gravitational mass of an isolated system is determined by the curvature of space at infinity, the inertial mass of an isolated system exceeds its gravitational mass by the value of the gravitational energy of space.