Monitoring of acoustic emission activity is employed to characterize the initiation and progression of local failure processes during nanoindentation-induced fracture. Specimens of various brittle materials are loaded with a cube-corner indenter and acoustic emission activity is monitored during the entire loading and unloading event using a transducer mounted inside the specimen holder. As observed from the nanoindentation and acoustic emission response, there are fundamental differences in the fracture behavior of the various materials. Post-failure observations are used to identify particular features in the acoustic emission signal that correspond to specific types of fracture events. Furthermore, analysis of the parametric and transient acoustic emission data is used to establish the crack-initiation threshold, crack-arrest threshold, and energy dissipation during failure. It is demonstrated that the monitoring of acoustic emission signals yields both qualitative and quantitative information regarding highly localized failure events in brittle materials.