Hydraulic cylinders are used in a wide range of applications such as oil drilling equipment, construction vehicles and manufacturing machines. Seal failure is one of the primitive causes of failure in hydraulic cylinders, possibly leading to fluid spill, unscheduled maintenance, reduced availability and thus leading to lower productivity. Regular visual inspection of seals without affecting the productivity is difficult as the seals are placed internally in the hydraulic cylinder requiring disassembly of the piston. Therefore, condition monitoring is required to assess the current health of the seals. There have been successful attempts made in literature for the assessment of seal quality using acoustic emission-based condition monitoring. However, there have been very few studies performed to diagnose the seal failure under varying speed and pressure parameters. Therefore, this study aims at increasing the understanding of seal failure under varying speed and pressure conditions through correlation with the acoustic emission signal. Experiments were performed on a hydraulic test rig using unworn, semi-worn and worn piston rod seals. For each seal wear condition, experiments were performed for five strokes at pressure conditions of 10, 20, 30 and 40 bar and speeds of 50 mm/s and 100 mm/s. Continuous acoustic emission data were acquired during all the tests. The acoustic emission signal of each piston rod stroke was analyzed using different acoustic emission features such as power spectral density, root mean square, peak, mean frequency, median frequency and band power. From the acoustic emission analysis, by using power spectral density, mean frequency and median frequency feature it is possible to identify and segregate unworn seal, leakage due to semi-worn seal and leakage due to worn seal in the test rig. The acoustic emission-based condition monitoring methodology developed in this study lays a strong foundation for further research to develop real-time monitoring of the piston rod seal in hydraulic cylinders that are used in the offshore industry.