We analyse the eigenvectors of the adjacency matrix of the Erdős-Rényi graph $\mathbb G(N,d/N)$ for $\sqrt{\log N} \ll d \lesssim \log N$. We show the existence of a localized phase, where each eigenvector is exponentially localized around a single vertex of the graph. This complements the completely delocalized phase previously established in [arXiv:2005.14180]. For large enough $d$, we establish a mobility edge by showing that the localized phase extends up to the boundary of the delocalized phase. We derive explicit asymptotics for the localization length up to the mobility edge and characterize its divergence near the phase boundary. The proof is based on a rigorous verification of Mott's criterion for localization, comparing the tunnelling amplitude between localization centres with the eigenvalue spacing. The first main ingredient is a new family of global approximate eigenvectors, for which sharp enough estimates on the tunnelling amplitude can be established. The second main ingredient is a lower bound on the spacing of approximate eigenvalues. It follows from an anticoncentration result for these discrete random variables, obtained by a recursive application of a self-improving anticoncentration estimate due to Kesten.