Ultrasonic vibration is applied to diamond turning of special stainless steel to decrease diamond tool wear and improve the surface quality of the workpieces. It reviews the principle of diamond turning of special stainless steel by applying ultrasonic vibration combined with gas shield. Compared with the ordinary machining method, cutting temperature and cutting force are greatly reduced when machining by application of ultrasonic vibration, and the appetency between a diamond tool and Ferrous atom of a workpiece is also minimized as gas shield application. The Experiments of cutting special stainless steel workpieces show that the surface roughness Ra is less than 0.15μm and flank wear-width is less than 5μm when cutting distance is up to 2000m. It takes research on the effect of cutting parameters to surface roughness and tool wear. The experiment result shows that the amplitude is the most important factor which effects tool wear and surface roughness most.