How do I know when to replace chain or sprockets?

CHAIN wears internally. The pins, bushings, and rollers are in constant contact, and as they wear they lose small amounts of material. Although you cannot see the parts themselves, wear and corrosion may be indicated by reddish-brown material coming out when the chain is oiled. Chain also elongates as it wears. A chain should be replaced when elongation has reached 2.5% to 3%.
A SPROCKET wears at the points where the chain contacts the teeth. As chain stretches and the rollers get further apart, they don’t drop into the gullets, but ride higher on the teeth. As the teeth wear at those higher points, they deform and “hook”, or start to bend to one side. By this point, the sprocket and the chain both need to be replaced.