The microscopic mechanism of ultrasonic wire bonding is investigated by molecular dynamics simulation on the interfacial contact and adhesion. Considering that the real bonding area is in the state of plane strain, a two-dimensional atomic model is presented. Sutton-Chen potential is adopted for the interaction between gold atoms. Computational results indicate that a strong adhesion generates at the interface after intimate contact between the wire and the bond pad, and the adhesive force should be the mechanism of ultrasonic wire bonding. Combining the real contact area from finite element analysis with the adhesive force from molecular dynamics simulation, the bonding strength of ultrasonic wire bonding is estimated.