The article presents fundamental results which significantly change the theory of gravity: (1) Gravitational energy is localized. The problem, from which Einstein, Eddington, and other classics have distanced themselves, has been solved. This is contrary to Landau, Lifshitz's assertion that "It has no meaning to speak of a definite localization of the energy of the gravitational field in space". This is contrary to Misner, Thorne, Wheeler’s assertion that "One cannot define a localized energy-momentum for the gravitational field". (2) For the first time it is stated that the law of conservation of inertial mass-energy is violated during gravitational interaction and the mass defect is positive. The inertial mass-energy of bodies exceeds their gravitational mass by the massless energy of curved space-time. This is contrary to Misner, Thorne Wheeler’s assertion that "The mass-energy of a neutron star is less than the mass-energy of the same number of baryons at infinite separation".