Thermal damage in Beishan granite subjected to high temperature treatment (from 100°C to 800°C at different heating rates, ranging from 1 to 15°C/min) is studied in order to assess the thermal effect on physical and mechanical properties. Laboratory tests including acoustic emission (AE) monitoring, ultrasonic velocity and porosity measurements, scanning electron microscope (SEM), tri-axial compression tests with permeability measurement were applied in this study. Two temperature thresholds, 300°C and 573°C, are recognized. Physical and mechanical properties of heated granite weaken with the increase of temperature. Especially when the temperature exceeds 573°C, the weakening becomes more pronounced. Thermally induced cracks in granite are mainly intergranular cracks from 100°C to 573°C. However, once the temperature exceeds 573°C, intra-granular cracks begin to develop due to the phase transition of quartz. Two typical stress-permeability curves of heated granite are observed and their mechanism is analyzed. In addition, the relationship between the number AE hits and initial permeability is discussed. The volumetric strain of cracks is applied to study the permeability evolution during the compressive loading process.