This paper investigates the potential for using acoustic emission signal analysis for a monitoring technique for process automation as well as a sensitive tool for investigation of grinding fundamentals. The acoustic emission generated during the grinding process is analyzed to determine its sensitivity to process efficiency and the condition of the grinding wheel. Acoustic emission from surface grinding is used to measure wear-related loading of the grinding wheel and sparkout (or loss of contact) between the wheel and the work surface. A discussion of energy dissipation in grinding and the generation of acoustic emission is included. This investigation showed that the acoustic emission energy, (RMS)2, increases with the combined effects of wheel wear and loading, the signal energy, (RMS)2, is a function of the undeformed chip thickness and that the signal accurately detects work-wheel contact and sparkout with a higher sensitivity than force measurements.