In nanoscale cutting of silicon wafer, it has been found that under certain conditions ductile mode chip formation can be achieved. In order to understand the mechanism of the ductile chip formation, experiments and molecular dynamics (MD) simulations have been conducted in this study. The results of MD simulations of nanoscale cutting of silicon showed that because of the high hydrostatic pressure in the chip formation zone, there is a phase transformation of the monocrytslline silicon from diamond cubic structure to both β silicon and amorphous phase in the chip formation zone, which results in plastic deformation of the workpiece material in the chip formation zone, as observed in experiments. The results further showed that although from experimental observation the plastic deformation in the ductile mode cutting of silicon is similar to that in cutting of ductile materials, such as aluminium, in ductile mode cutting of silicon it is the phase transformation of silicon rather than atomic dislocation that results in the plastic deformation.