Recent research has greatly improved our understanding of the basic mechanisms of deformation and fracture that generate detectable acoustic emission signals in structural steels. A critical review of the application of acoustic emission (AE) to the fabrication, proof testing and in-service monitoring of nuclear pressure vessels is presented in the light of this improved understanding. The detectability of deformation and fracture processes in pressure vessel steels is discussed, and recommendations made for improving source location accuracy and the development of quantitative source assessment techniques. Published data suggest that AE can make an important contribution to weld fabrication monitoring, and to the detection of defects in lower toughness materials during vessel proof testing. In high toughness materials, however, the signals generated during ductile crack growth may frequently be too weak for reliable detection. The feasibility of AE for continuous monitoring has not yet been adequately demonstrated because of high background noise levels and uncertainty about AE signal strengths from the defect growth processes that occur in service. In-service leak detection by AE shows considerable promise. It is recommended that further tests are carried out with realistic defects, and under realistic conditions of loading (including thermal shock and fatigue) and of environment.