Acoustic emission has previously been shown to be a useful technique in monitoring the state of wear in machine tools. The piezoelectric transducers conventionally used for acoustic emission detection are contacting devices with a limited bandwidth. Operationally, a non-contacting transducer of broader bandwidth would be preferred. We have accordingly developed a technique based on optical interferometry, using fibre optics, to produce a miniature and robust probe for detecting acoustic emission by measuring the small amplitude (approximately 0.1 nm), high frequency (0.1-1 MHz) surface vibrations that it produces. We demonstrate the technique in measurements made probing both the workpiece and the rotating tool holder during face milling of mild steel.