Vibration analysis is widely used in machinery diagnosis and the wavelet transform has also been implemented in many applications in the condition monitoring of machinery. In contrast to previous applications, this paper examines whether acoustic signal can be used effectively along vibration signal to detect the various local fault, in local fault of gearboxes using the wavelet transform. Moreover, envelop analysis is well known as useful tool for the detection of rolling element bearing fault. In this paper, a acoustic emission (AE) sensor is employed to detect gearbox damage by installing them around bearing housing at driven-end side. Signal processing is conducted by wavelet transform and enveloping to detect her fault all at once gearbox using AE signal.