Select the item in question in the middle section of Zotero and press the alt-key. The collection that contains the item will show up with a yellow highlight.

Your item may not be in any collection. Best to start with an item that definitely is in a collection and verify it works. There is a useful page here: here. I'm on a Mac; it's the option/alt key on a Mac, Ctrl on Win and Alt on Linux.

Main page about this: http://www.zotero.org/support/kb/collections_containing_an_item

I have tried this in all sorts of ways on Mac and PC, to no avail. I search (advanced search) and then select the attachment item, and double click while holding down the cmd or Ctrl key and the result is to identify the item in an aggregated list of all items in all collections, without any identification of which sub-collections it appears in.

Please help, as I have 100s of items in my collections.

@dstillman Is this the link you are referring to:
http://www.zotero.org/support/kb/collections_containing_an_item

This is no clearer to me, in order to see the sub-collections in which a searched item is located in.

Could you give me a step by step description? What I am doing is as follows:
1. Advanced Search.
2. Double click item that takes me to Library view.
3. I can then open the item, however, I have no idea of which sub-collection it comes from.
4. I have tried to select item and press cmd key in Advanced Search and Library and nothing happens.

Am I missing something? In the past I have seen the sub-collection yellow highlighted in Library view. This is no longer the case.

Sorry, I have now tried the alt key (which is the option key in Mac) and it does not highlight the sub-collection location of the item.

I have tried selecting the item and holding down the alt key both in the Advanced Search and Library.

I tried and still nothing. What plugin would be breaking it, as far as you may know?

Presumably a restart also?

While the item is selected in the center pane, hold down the Option key (macOS), Control key (Windows), or Alt key (Linux). If no collection or subcollection is highlighted on the left-hand pane, that means it is an unfiled item: You did not place it under a collection.

You can find a list of all your unfiled items if you click on "Unfiled Items" at the bottom of your collections in the left pane.

Try dragging that item into a relevant collection on the left, hold down the mentioned key above, and that collection's name will turn yellow on the left hand side. Since an item can be in many collections, multiple collection names should turn yellow if that's the case.

@LWTaylor: You have to hold the key down, as explained on the linked documentation page, and the highlight appears as long as you hold it down. If you're seeing something different, there's something wrong on your system, but please start a new thread for that.