Apparatus and method for monitoring the wear of a downhole tool, and providing indication of the degree of wear to an operator at the well surface. A pressurized fluid path within the cutting element matrix can exhibit a pressure drop when wear of the matrix progresses into the fluid path, or rotating torque can exhibit a drop when wear of the matrix progresses to wear pads within the cutting element matrix. Other wear indicators can also be built into the cutting element matrix. Progression of wear down to the indicator can be directly measured at the well surface, or relayed to the surface via a downhole communication system.