Uniaxial compression tests are conducted on dry and water-saturated red sandstone specimens containing a single hole. The objective of these experiments is to examine the characteristics of stress and deformation, crack propagation mechanisms, acoustic emission characteristics and energy evolution based on the TAW-2000 test equipment, camera system and PCI-2 acoustic emission detector. The results show that the mechanical parameters of water-saturated rock samples are significantly lower than those of dry rock samples while the brittleness drop coefficients significantly increase. The crack propagation process is comprised of four distinct stages: the initial deformation stage, crack initiation stage, crack stable propagation stage and crack unstable propagation stage. The initial fissures and secondary fissures of water-saturated rock samples are more numerous and longer, and significant stress drop appears when initial cracks generate and cracks propagate unsteadily. The ring counts of rock samples focus on the crack initiation and crack unstable propagation stages. In numerous water-saturated rock samples, AE signals are fewer than thase in dry rock samples. The AE signals during the crack initiation stage are more than those during the crack unstable propagation stage. Compared with dry rock samples, the external energy is easier to dissipate in the water-saturated rock samples and the energy storage rate is slower to reach the peak. Consequently, the stored elastic energy is reduced in the water-saturated rock sample, which is more conducive to reducing the intensity of energy release during rock failure.