This paper presents the effects of ultrasonic vibration assistance on shear band formation and chip segmentation mechanism in orthogonal cutting of Ti–6Al–4V. Experimental observations of chip microstructure show that the shear bands disappear when vibration assistance is applied along tangential direction at certain cutting speeds. A plastic chip flow model is developed to predict the stress and temperature variations in the primary shear zone at cutting, chip elastic recovery, and tool-chip separation periods. The simulation results show that the temperature in the primary shear zone in vibration-assisted cutting is much lower when compared with conventional cutting, therefore suppresses the generation of shear bands. The simulations of average cutting forces and pitch lengths of chip segments are compared with the experimental results. A finite element model is further developed to prove the temperature reduction when ultrasonic vibration assistance is applied.