Alumina dispersion-strengthened copper (ADSC), as a representative particle-reinforced metal matrix composite (PRMMC), exhibits superior wear resistance and high strength. However, challenges arise in their processability because of the non-uniform material properties of biphasic materials. In particular, limited research has been conducted on the reinforcement mechanism and behavior of particles during material cutting deformation of PRMMC with nanoscale particles. In this study, a cutting simulation model for ADSC was established, separating the nanoscale reinforcement particles from the matrix. This model was utilized to analyze the interactions among particles, matrix, and tool during the cutting process, providing insights into chip formation and fracture. Particles with high strength and hardness are more prone to storing stress concentrations, anchoring themselves at grain boundaries to resist grain fibration, thereby influencing the stress distribution in the cutting deformation zone. Stress concentration around the particles leads to the formation of discontinuous chips, indicating that ADSC with high-volume fractions of particle (VFP) exhibits low cutting continuity, which is consistent with the results of cutting experiments. The tool tip that is in contact with particles experiences stress concentration, thereby accelerating tool wear. Cutting ADSC with 1.1% VFP results in tool blunting, which increases the radius of cutting edge from 0.5 to 1.9 mu m, accompanied with remarkable coating delamination and wear. Simulation results indicate that the minimum uncut chip thickness increases from 0.04 to 0.07 mu m as VFP increases from 0.3% to 1.1%. In conjunction with scratch experiments, MUCT increases with the augmentation of VFP. Computational analysis of the specific cutting force indicates that particles contribute to the material's size effect. The results of this study provide theoretical guidance for practical engineering machining of ADSC, indicating its great importance for the process design of components made from ADSC.