We use our monomialization theorem to prove local factorization of birational morphisms. Suppose that X --> Y is a birational morphism of varieties, over a field of characteristic zero. Given a fixed valuation of the function field of X, we prove that there exist sequences of monoidal transforms (blow ups of nonsingular subvarieties) X1 --> X and Y1 --> Y such that X1 --> Y1 is a morphism, and X1 = Y1 at the center of V. This proves a conjecture of Abhyankar.