Experimental research on grinding characteristics of nano-composites ceramics were carried out using diamond wheel in two-dimensional ultrasonic vibration grinding (TDUVG) and the topography of the scratched grooves were observed with Transmission Electron Microscope. The surface crack, plastic deformation and brittle-ductile transition during chip formation were analyzed. Subsequently, the grinding model of nano-composites ceramics machining in TDUVG was established based on fracture theory of micro-indentation in fracture region and plastic information mechanism of hard-brittle materials. The metamorphic layer can be divided into three regions: brittle-fracture, non-elastic deformation and residual damage region. Ultrasonic grinding process can be divided into three phase: elastic friction and extrusion, crack growth and crack propagation and chip formation.