A method of combining autocorrelation function with cyclostationary theory and Hilbert envelope analysis is proposed and applied to extract characteristic frequency of rolling bearing. Meanwhile, mean power ratio is calculated and used to identify the fault types of aero-engine rolling bearing based on single-channel casing vibration signal. To verify the effectiveness of proposed method, a comparing analysis is carried out between traditional studies and proposed new method. Furthermore, the influences on the extraction of characteristics and calculation of mean power ratio are taken into account, including the ones of sensor installation position, fault types, type of experiment rigs, failure mode and rotational speed of rolling bearing. The result shows that the proposed method can diagnose running conditions and identify fault types of rolling bearing accurately and effectively just by single-channel casing vibration signal.