Limit Break Levels
Each character has seven Limit Breaks. The first three levels each have two Limit Breaks, and the fourth level has one Limit; each character gains his or her fourth-level Limit Break differently. For example, Cloud has Braver and Cross-Slash as his two Level 1 Limit Breaks. Level 2 Limits such as Cloud's Blade Beam and Climhazzard, when set, replace the Level 1 techniques. If you have the Limit Breaks on a certain level, you can only use that level, so you should think strategically about what capabilities you want your characters to have.
Limit Gauge
Each character's Limit Gauge fills completely when a certain percentage of his maximum hit points--HP--is taken, and this percentage increases with the Limit Break level. For example, at Level 1, Cloud's Limit Gauge fills completely when he loses 46.5 percent of his maximum HP; Level 2, 107.6%; Level 3,144.4% and Level 4, 168%. Only damage that the character survives counts toward this. If the character is defeated, the gauge resets.
Learning New Limits
Characters learn the first Limit Break in each of their sets upon making a certain number of kills in battle, and it is cumulative. You can learn the first Limit Break in each set without learning the second one. The second Limit Break becomes available after a certain number of uses of the first technique. For example, you have to use Aerith's Healing Wind eight times to learn Seal Evil, her second Level 1 technique. To learn Breath of the Earth, her first Level 2 technique, she needs to make 80 kills. Each character's Level 4 Limit, such as Cloud's Omnislash or Tifa's Final Heaven, is in the form of a manual usable as an item in the menu.
Considerations
Some characters have Limits that are up to chance. Tifa's Limit Breaks are determined by slots, and she performs each move in a sequence on a random enemy. Vincent's Limits cause him to transform into a monster and you lose control of him, meaning he could use an attack that ends up healing the enemy. Cait Sith's Limits have as much chance of harming you as they do your enemy; in fact, one of them causes you to lose the battle instantly.