Saw-tooth chip has great effect on the dynamic cutting forces, cutting temperature waviness, PCBN tool life and surface integrity during precision hard part machining. The forming and finish process of saw-tooth chip could be observed through different high frequencies of dynamic cutting forces by wavelet analysis. According to the cutting speed, feed rate, sampling frequency and time, the characteristic parameters of saw-tooth chip type and shear instability could be calculated based on the saw-tooth chip forming frequency formula supported by M.C.Shaw theory. The forming frequency of saw-tooth chip was far smaller than high frequency of cutting forces under the normal cutting parameters during precision hard part machining process, and will be moved similar equal to each other under the high cutting speed. Experimental results and analysis show that the basic characteristics of saw-tooth chip could be calculated through dynamic cutting forces wavelet analysis.