While using natural diamond tool to cut stainless steel alloy, the cutting parameters have a great impact on tool life. The impact of cutting parameters on influencing cutting tool life was studied through experiments on using ultrasonic vibration to cut special stainless steel alloy. The experiments were conducted with various cutting speeds, different tool feed rates, altered cutting depths and adapted vibration parameters. Consequently, the relative curve between cutting parameters and tool life was obtained. The experimental results indicated that in the ultrasonic vibration the diamond tool can manufacture stainless steel alloy precisely and made surface quality well. The tool life depended on the spindle speed of machine tool as well as the amplitude and frequency of ultrasonic vibration to a large extent. Among the parameters which affect the processing quality, cutting speed was utmost, followed by feed followed, and the influence of back cutting depth was insignificant.