Based on mechanism of AE creation, put forward sphere cavity model, and deduced wave Equation of AE wave radiated by the AE source in detail, and analyzed the propagation attenuation law of AE stress wave in coal (rock) strata. Displacement function of AE wave indicates that displacement field can be divided into two parts. Firstly, displacement of particle is approaching to the source intensity function in zone near the AE source. Secondly, in zone far away from the AE source, displacement of particle is approaching to the derivative of source intensity function. AE wave changes gradually in the spreading process, and notable change of the wave form happens when wave propagates far away from the AE source.