Abstract: In order to investigate the mechanisms of matrix damage and sub-surface damage in carbon fiber reinforced resin matrix composite, cutting process simulation model was developed based on macroscopic anisotropy. Hashin-Damage failure model was adopted. Through defining ultimate stresses of fiber tension cracking and fiber compression buckling, ultimate stresses of matrix longitudinal tensile and shear damage, a dynamic physics simulation model of composite was established. The reasonability was validated by comparison cutting force between simulation results and experimental data of cutting force. By analyzing cracking and crushing phenomenon of matrix at 0° and 90° fiber orientation, it shows that the matrix cracking orientation substantially parallel to the fiber orientation, and matrix crushing mainly happened around the cutting tool tip when steady state condition is reached. The influence of fiber orientation on sub-surface damage was studied. It shows that the cracking of sub-surface damage value increases with the increase of fiber orientation angle.