This review summarises the state of knowledge on acoustic emission (AE) techniques applied to material property evaluation during indentation (e.g. hardness) testing. There are two aspects of application of AE technique to indentation which makes it unique, i.e. (1) enhancing the understanding of the evolution of material accommodation mechanisms under loading and (2) qualitative and quantitative evaluation of mechanical properties such as fracture toughness and bond strength from the AE signal. Both of these aspects have the potential to improve our understanding of the structure property relationships of current and future generation materials. In addition, the knowledge developed here can be incorporated to improve the AE based condition monitoring systems for stress critical applications. This review concentrates on the phenomena which occur during indentation and how its examination can be used to study more fundamental behaviour of materials such as deformation and fracture. The uncertainty in quantifying and measuring the total crack surface in indentation makes a simple fracture mechanics based assessment of toughness difficult. It is therefore expected that correlation between AE and fracture patterns will lead to an improved method for material’s quality evaluation. The main part of this review is presented on AE of material classifications. These classifications include ceramics, glasses, composites, metals and metallic foams, thin solid films and thermally sprayed coatings. Apart from quasi‐static indentation testing, attention has also been paid to studies on various AE instrumented indentation systems so that information can be derived about the progress of deformation and cracking processes. This review discusses the studies summarising those aspects that have so far been established and the areas of controversy and/or lack of knowledge. The prospect of using AE techniques to monitor indentation tests is also assessed, taking into account those few studies that have been reported so far in different groups of materials. Although with some limitations, it is concluded that AE monitored indentation testing has considerable scope to assess in much more detail the deformation and cracking properties of materials under localised stress condition. It is possible to construct empirical relationships and develop theoretical understanding linking mechanical parameters with AE signal characteristics and its derived features. However, the occurrence of multiple events at different locations superimposing the AE signal requires more advanced signal processing techniques. With the advancement of very thin films and nanomaterials, it is anticipated that AE response measured during nanoindentation will be critical for enhancing our understanding of future generation applications, as it allows individual events to be investigated without resorting to more complex signal processing techniques. In terms of material accommodation, the understanding of physical mechanisms generating AE require a multiscale approach, e.g. correlations exist between fracture and sudden release of AE energy, dislocations and Bremsstrahlung and Frank–Reid sources, and maternsitic phase transformation with rapid variation in the shape of deformation volume generating AE exist; however, integration of continuum elastic–plastic and molecular dynamics models is necessary to enhance our understanding of the physical mechanisms generating AE response. This multiscale approach can be further helped by the experimental data using AE instrumented nanoindentation as it allows very localised and fine scale measurement in load or displacement control.