Rolling bearing are one of the most important rotating components in the rotating machine and they are prone to failure due to complex harsh working conditions. However, it’s a difficult issue to extract the fault feature from heavy noisy signal. In this paper, a new multilayer hybrid denoising method called local mean decomposition (LMD)-based enhanced sparse coding shrinkage (SCS) (named LMD-EnSCS) is proposed for impulse component extraction from bearing vibration signals. First, LMD is used to decompose the signal into a set of product functions (PFs) to enable impulse component as prominent as possible. Moreover, the multiple criteria is proposed to select the effective PF components. The rest filtering layer is used to enhance and extract the impulsive feature through minimum entropy deconvolution (MED) and sparse coding shrinkage (SCS) respectively. MED is able to enhance the impulsive component of noisy signal, which improve the impulsive extraction ability of SCS effectively. The simulation signal and bearing signal are used to verify the effectiveness and superiority of LMD-EnSCS, and the results show that LMD-EnSCS can extract the fault feature and perform well for bearing fault diagnosis.