Ensemble Empirical Mode Decomposition (EEMD) is a new signal processing technique aimed at solving the problem of mode mixing present in the original Empirical Mode Decomposition (EMD) algorithm. This paper investigates its utility for machine health monitoring and defect diagnosis. The mechanism of EEMD is first introduced. Parameters that affect effectiveness of the EEMD are then discussed with the assistance of a simulated signal in which the mode mixing exists. Experimental study on bearing vibration signal analysis verified its effectiveness of EEMD for machine health monitoring and defect diagnosis.