We attempt to determine whether the MACHO microlensing source stars are drawn from the average population of the LMC or from a population behind the LMC by examining the HST color-magnitude diagram (CMD) of microlensing source stars. We present WFPC2 HST photometry of eight MACHO microlensing source stars and the surrounding fields in the LMC. The microlensing source stars are identified by deriving accurate centroids in the ground-based MACHO images using difference image analysis (DIA) and then transforming the DIA coordinates to the HST frame. We consider in detail a model for the background population of source stars based on that presented by Zhao, Graff & Guhathakurta. In this model, the source stars have an additional reddening = 0.13 mag and a slightly larger distance modulus ~ 0.3 mag than the average LMC population. We also investigate a series of source star models, varying the relative fraction of source stars drawn from the average and background populations and the displacement of the background population from the LMC. Due to the small number of analyzed events the distribution of probabilities of different models is rather flat. A shallow maximum occurs at a fraction s_LMC ~ 0.8 of the source stars in the LMC. This is consistent with the interpretation that a significant fraction of observed microlensing events are due to lenses in the Milky Way halo, but does not definitively exclude other models.
