This document discusses using acoustic emission monitoring and artificial neural networks to diagnose faults in rolling element bearings. Acoustic emission detects high frequency elastic waves from defects, and is more sensitive than vibration monitoring to incipient faults. An artificial neural network is trained using acoustic emission amplitude, load, speed and other statistical parameters as inputs to predict seeded defect sizes in bearings. The network architecture includes nine input nodes, ten hidden nodes, and one output node. Testing showed the neural network approach can accurately estimate defect sizes from acoustic emission data.