We investigate the influence of capillary effects on wave breaking through direct numerical simulations of the Navier-Stokes equations for a two-phase air-water flow. A parametric study in terms of the Bond number, Bo, and the initial wave steepness, , is performed at a relatively high Reynolds number. The onset of wave breaking as a function of these two parameters is determined and a phase diagram in terms of ( , Bo) is presented that distinguishes between non-breaking gravity waves, parasitic capillaries on a gravity wave, spilling breakers and plunging breakers. At high Bond number, a critical steepness c defines the wave stability. At low Bond number, the influence of surface tension is quantified through two boundaries separating, firstly gravity-capillary waves and breakers, and secondly spilling and plunging breakers; both boundaries scaling as ∼ (1 + Bo) −1/3 . Finally the wave energy dissipation is estimated for each wave regime and the influence of steepness and surface tension effects on the total wave dissipation is discussed. The breaking parameter b is estimated and is found to be in good agreement with experimental results for breaking waves. Moreover, the enhanced dissipation by parasitic capillaries is consistent with the dissipation due to breaking waves.