In order to monitor the operation state and implement fault diagnosis of rolling bearing in rotating machinery, this paper presents a method of fault diagnosis of rolling bearing, which is based on EMD and resonance demodulation. Using EMD to decompose the signal, which comes from QPZZ-II experimental station, the components of intrinsic mode function (IMF) will be obtained. Then, calculating the correlation coefficient of each IMF component, the highest correlation coefficient of IMF component will be analyzed by resonance demodulation. Finally, the experimental results show that the method can accurately identify and diagnose the running state and bearing fault type.