This article addresses acoustic emission (AE) wave attenuation in acrylic bone cement and wave attenuation due to the existence of material interface between acrylic bone cement and sawbone. In this article, a series of tests were performed using standard pencil lead break sources. The attenuation features inside acrylic bone cement and sawbone materials and the attenuation due to the existence of material interfaces such as cement-cement and cement-sawbone were studied. In addition, the discrete wavelet-based signal energy decomposition method was introduced to examine detail breakdown of signal energy distribution of attenuation. From the tests, it was observed that the attenuation of AE signal was linear with respect to the wave travel distance for both energy and amplitude. Furthermore, AE energy attenuation was more sensitive than AE amplitude attenuation. In the analysis of attenuation due to material interfaces, the couplant plays a major role in reducing the attenuation at the interfaces. The attenuation at an interface composed by different material is less compared with an interface composed by the same material.