This paper reviews diverse observations of acoustic emission from materials and attempts to interpret them on the basis of current knowledge of plastic deformation and fracture. An attempt is made to unify diverse and often conflicting findings paying special attention to microstructural conditions. Observed acoustic emission characteristics have been classified according to their probable origins such as heterogeneous and homogeneous yielding, dynamic strain aging, twinning, decoheston and fracture of second phase particles, and deformation‐induced transformation. Temperature effects and sources of burst‐type emissions are considered. The micro‐yielding concept and other mechanisms are correlated to various acoustic emission behavior observed. Fracture processes generally produce high levels of acoustic emission. Various fracture mechanisms found in different classes of materials are correlated to observed acoustic emission behavior. Relationships between different AE parameters and stress intensity factor or crack tip opening displacement are discussed. It is shown that the consideration of second phase particles is of crucial importance in identifying the mechanisms of acoustic emission. [Work supported by ONR.]