Metal syntactic foams are a novel grade of materials that find potential applications in the manufacture of lightweight structural components and biomedical applications. For these materials to be inducted into industrial applications, it becomes imperative to study their machining behavior. In this article, for the first time in the literature, machining characteristics of AZ91 magnesium foam reinforced with thin-walled hollow alumina ceramic microspheres being studied. Through cutting experiments, it is found that finer the size of hollow microspheres and higher their volume fraction, higher was the magnitude of cutting forces recorded. The failure mechanisms that constituted chip formation during cutting AZ91 foam has been explicated through a mechanistic cutting force model. The proposed force model takes into account key hollow alumina microsphere properties such as wall thickness-to-diameter ratio, average microsphere size, and volume fraction. The scanning electron microscopic (SEM) analysis showed two key modes of failure during cutting metallic foams. Microsphere bursts and fractures control matrix plastic deformation through an effective load transfer mechanism. The transverse matrix cracks, which are initiated as a result of induced shear stress, promote the propagation of longitudinal adhesive cracks. This rapid crack growth takes place along the direction of maximum energy release rate, thus weakening the interfacial strength and reducing effective load transfer. This leads to microsphere separation, and further matrix densification due to the collapse of microsphere cavities leads to chip separation. The developed mechanistic model was in better agreement with experimental results.