Among various unconventional Non-Destructive testing (NDT) methods, Acoustic Emission (AE) referred as the most suitable NDT method for detection and characterization of material defects during machining on nanocomposites. AE technique can also be applied for dynamic machining operation called drilling for better understanding of different drilling events from start to the end of the process. The present paper mainly focuses on on-line monitoring of drilling-induced delamination of multi-walled carbon nanotubes (MWCNTs) reinforced glass fiber reinforced plastic (GFRP) nanocomposites laminates through AE technique. A 4 mm thickness of 0.3wt% MWCNTs reinforced GFRP laminates were fabricated by 16 layers of glass fabric cloth with modified epoxy resins for drilling experimentation and trails were conducted on these laminates with uncoated, TiCN and TiAlN coated 6mm diameter carbide twist drills. Design of experiments were planned based on Taguchi L9 orthogonal array and speed, feed were considered as input process parameters. The AE output response parameters such as Root Mean Square (RMS) voltage, AE rise, energy, peak amplitude, hits, AE count, duration and counts to peak were helped to analyse the delamination mechanisms as well as cutting force generation during drilling on nanocomposites. From the experimental results, it was concluded that low feed rate (0.02 mm/rev) and high spindle speed (1500 RPM) with TiCN coated carbide drill gives the reduced delamination factor and thrust force values. Additionally, AE parameters were also highly influenced by the cutting parameters as well as delamination mechanisms. Out of all AE parameters AE-RMS voltage designated as the important parameter to analyse the delamination factor and increased RMS voltage observed with higher feed rate and cutting forces. The other AE parameters were very closely associated to the RMS voltage. Finally, it was confirmed that AE is most suitable NDT technique for on-line monitoring of drilling induced delamination for production of defect free holes on GFRP-MWCNTs composites laminates. © 2017 Elsevier Ltd.