Rock is a natural brittle material, and under compressive stresses fracture and failure occur by initiation, growth and interaction of microcracks forming macroscopic cracks and finally leading to a fault. As stress vs. volumetric strain curve can give only qualitative results, both for understanding the phenomenon of fault formation in terms of microcracking stages quantitatively and also for accurate prediction of impeding failure it becomes essential to identify the stages of the stress vs. volumetric strain curve by a suitable technique. Thus, in this respect the advantages of acoustic emission, a real-time on-line monitoring technique, is investigated. Conventionally, plots based on cumulative events, event rate and amplitude distribution are used to understand crack growth. while these parametric plots give the trends in terms of their AE activity, the exact characteristics of events in relation to the phenomena at different stress levels of micro and macro crack progression to failure are not easily discernible. So, in the present work based on the recorded wave form parameters, events are classified into four groups as α, β, γ and δ and are characterized as micro and macro crack phases which correlate with ultrasonically imaged data. Classification of events into micro and macro crack phases gives a better understanding of fault formation in rock materials and also the effect of stress, temperature, macrostructure, mineralogy, etc.