Borehole breakout is the process by which portions of borehole or tunnel wall fracture or spall when subjected to compressive stresses. The stress-strain characteristics of rock during loading and unloading confining pressure are studied firstly. To overcome the difficulties in analytical model studies, a numerical code, RFPA2D (Rock Failure Process Analysis), developed by CRISR, Northeastern University, China, is used to investigate the progressive failure of breakout around tunnel. The heterogeneity of rock was also taken into account in the software. The numerical simulation reproduces the formation notch in rocks by the growth, interaction and coalescence of randomly distributed macrocracks. It is illustrated from the numerical simulated results that breakout direction of tunnel is parallel with the minor stress tensor in the plane perpendicular to the borehole axis. Specifically due to the inclusion of heterogeneity, some peculiarities are studied both in the evolution of fracture and the influence of borehole on the peak intensity of specimen as well as the AE event patterns.