In the field of machinery manufacture, broken state at the time of the cutting tool in cutting metal, recognition has always been a study is of great significance. Currently, for the state of tool wear and collapse edge damage identification method already has a mature experience. However the existing condition monitoring methods are often used in accuracy and convenience has limitations, this paper USES the acoustic emission technology, as a kind of integrated online test sys tem design lay the foundation. This paper aimed at the sensor in the wireless transmission module, the performance characteristics of tool condition monitoring system of the main structure was designed, and then by acoustic emission signal from the cutting tool in cutting process as the research object, studies the cutting tool characteristics of acoustic emission signal under different damage state, for the on-line monitoring system design and calibration to provide theoretical support.