Bearing failure is one of the foremost causes of breakdown in rotating machinery. To date, Envelope detection is always used to identify faults occurring at the Bearing Characteristic Frequencies (BCF). However, because the impact vibration generated by a bearing fault has relatively low energy, it is often overwhelmed by background noise and difficult to identify. Combined the results of extensive experiments performed in a series of bearings with artificial damage, this research investigates the effect of many influencing factors, such as demodulation methods, sampling frequency, variable machine speed and the signals collected in different directions, on the effectiveness of demodulation and the implications for bearing fault detection. By understanding these effects, a more skillful application of the envelope detection in condition monitoring and diagnosis is achieved.