A novel fibre optic sensor system has been developed for detection of acoustic emission. The sensor design was based on a 2×2 fused tapered optical fibre coupler configuration. Given the intended use of this sensor for the detection of acoustic emission in smart materials and structures, its lightweight, compatibility with composite material and immunity from electromagnetic interference are great advantages. Apart from the performance specification and reliability, the overall cost of the sensor system is a major factor in their adoption by end-users. The manufacturing of this sensor is low-cost and the signal output from the sensor system developed can be directly fed to the commercial AE acquisition system. The demonstration of acoustic emission detection was conducted using fibre coupler-based AE sensors in different materials and structures. The AE sources are various and depend on the different applications. In the current paper, we report on the use of the fibre optic AE sensor system for concrete damage monitoring. An experiment on damage detection on a composite plate with this fibre optical AE sensor is also reported in the paper.