Effect of plane strain machining parameters such as rake angle and cutting velocity on the formation of ultra-fine structure in several materials has been studied. The microstructure and hardness of chips generated by machining were characterized by optical microscopy, scan electron microscopy and hardness tester respectively. The experimental results indicated that chip materials with ultra-fine grained and high hardness can be produced with more negative tool rake angle at some lower cutting velocity. The rake angle has more important effect on the formation of ultra-fine grain chips than cutting velocity. The rake angle for getting chips of obvious refined and significant hardened is different for different materials respectively. While the temperature of shear plane and tool-chip interface are increased with the increasing cutting velocity which alleviates the increase of hardness produced by decreasing rake angle.