In this paper, classification of spall and crack faults of gear teeth is studied by applying the ensemble empirical mode decomposition(EEMD) for the gear transmission error(TE). Finite element models of the gears with the two faults are built, and TE is obtained by simulation of the gears under loaded contact. EEMD is applied to the residuals of the TE which are the difference between the normal and faulty signal. From the result, the difference of spall and crack faults are clearly identified by the intrinsic mode functions(IMF). A simple test bed is installed to illustrate the approach, which consists of motor, brake and a pair of spur gears. Two gears are employed to obtain the TE for the normal, spalled, and cracked gears, and the type of the faults are separated by the same EEMD application process. In order to quantify the results, crest factors are applied to each IMF. Characteristics of spall and crack are well represented by the crest factors of the first and the third IMF, which are used as the feature signals. The classification is carried out using the Bayes decision theory using the feature signals acquired through the experiments.