Microcutting of particle dispersion-hardened alloys are performed with SEM direct observation method. These alloys, hypereutectic Al-Si alloy and Al-Ni binary alloy, include second-phase hard particles in the soft matrix with comparatively rich (Al-Ni) or poor (Al-Si) ductility. Tool wear of carbide tool in the turning of Al-Ni alloy is hardly observed; this indicates that the ductility in the matrix would play an important role to reduce the severe tool wear. Summary of the results are shown below. (1) Compressive load to start the fragmentation of a simple particle in both alloys shows almost the same value. (2) The increas-ing rate of percentage of fractured particles in Al-Ni alloy by the compression test is smaller than that in Al-Si alloy. This can be attributed to the load relaxation to second-phase particles induced by the plastic flow of the matrix. (3) Fragmentation of particles and direct collision of particles with the cutting tool were observed in microcutting of these alloys by SEM direct observation method. (4) Rich ductility of the matrix in Al-Ni alloy would produce the elusion of particles in the case of direct collision of particles with the cutting edge; this indicates that the extent of damage to the cutting edge by particles should be small. (5) Poor ductility of the matrix in Al-Si alloy causes higher frequency of the mechanical scratching action by particles for tool flank.