Acoustic emission (AE) waves in milling are measured by mounting an AE sensor on the workpiece owing to the need of a signal line for the AE sensor. However, if the distance between the AE sensor and the machining point is excessive, attenuation may hinder the measurement of AE waves. Therefore, AE waves in milling should preferably be measured at the tool side. This study developed a device for monitoring cutting tools using a wireless AE sensor. The proposed device measures the amount of chipping at the cutting edge of the end mill during milling. This study specifically focused on the milling of narrow grooves with a small-diameter end mill using a machining center. With the developed device, the AE waves generated from the chipping of the cutting edge are measured at the tool, and the measured data are transmitted wirelessly. Three different methods were tested for attaching the AE sensor to the tool holder, confirming that the AE waves could be measured. Then, an end mill was placed in contact with a diamond, and the AE waves generated by chipping of the cutting edge were measured. Narrow grooves were milled with an end mill to demonstrate that the device could measure the AE waves generated from the cutting edge when chipping occurred. Observations suggest that the developed device can monitor the size of chipping of cutting edges.