The cutting performance and wear mechanisms of whisker-toughening ceramic cutting tools synthesized by carbothermal reduction process have been studied when cutting the hardened alloy steel 40Cr. It is indicated that the wear resistance of ceramic tools is affected by the molar ratio of C and N in tool materials. At low cutting speed, the main tool wear mechanisms are abrasive wear and oxidation wear. At middle and high cutting speed, the tool wear mechanisms are controlled by abrasive wear, adhesive wear, diffusion wear and oxidation wear simultaneously. Adding whiskers to the matrix material is one of the effective means to improve the wear resistance of ceramic cutting tools.