According to acoustic emission signal of cutting tool state at different periods, this paper uses chaotic theory to describe damage characteristics from qualitative and quantitative aspects. The phase space reconstruction reflects the changing strange attractor track of acoustic emission series. The quantitative indicators, such as correlation dimension, the max Lyapunov exponent, Kolmogorov entropy and degree of disorder, describe the chaotic characteristic changes during process of tool cutting. Analysis results show the existence of chaotic phenomena in the acoustic emission signal of tool and at different cutting periods, the chaotic characteristics behave different value. Therefore the description of characteristics changes provide a new idea for online monitoring of tool damage.