This presentation will review the general theory behind the Amplitude Demodulation (also called Envelope Analysis) and how this process is implemented as a separate signal processing function. We will see how this well known process can be applied to the field of vibration diagnostic, such as: roller bearing defect diagnostic; gear boxes fault identification (looking at the modulation of the tooth mesh vibration frequency) and other mechanical fault causing an amplitude modulated vibration signals. Real life test data will be used to support the presentation.