The chip-breaking groove of a blade is one of the main factors influencing chip control. In this paper, we report the use of a virtual reality technique to optimize the shape of the groove on a blade according to the status of chip formation and breakage. First, by using the software, World Tool Kid, the virtual cutting systems were developed to determine the linkages between the moving parts in the machine tool and display the virtual course of chip formation and breakage. And then, the virtual reality of optimizing the shape of the turning blade groove was carried out, that is, during calculation of loci in dimensional movement and solving mathematical model of the chip breakage, by inputting the groove’s parameters and cutting conditions of the blade, and simulating the track in dimensional movement of a chip and the restricting relations between the chip and each barrier, the intersecting coordinates in dimensional points of chips and the breaking manner could be solved. For improper chip-breaking manner, by modifying the model parameters, the blade groove was recalculated until the chips could be broken with ease. Based on the shapes of chips, the shape of the blades’ groove can be optimized to get optimal shape.