New demands are being placed on monitoring systems in the manufacturing environment because of recent developments in machining technology and machine tool design. In-process sensors are used to generate control signals to improve both the control and productivity of manufacturing systems. Numerous different sensors are available for monitoring and controlling the machining environment including force, power, and acoustic emission (AE) sensors. This paper first discusses the requirements for sensor technology for precision manufacturing process monitoring in general. Details are also given about AE and its application for process characterisation and monitoring in ultraprecision machining.