To investigate the propagation law of micro-crack in CVD diamond coating and reveal the coating delamination mechanism of CVD diamond coating micro-tools. This paper establishes the uniaxial tension models of CVD diamond coating, which contained vertical micro-cracks in the coating and horizontal micro-cracks between the coating and the substrate in ABAQUS to analyze the stress distribution and stress intensity factor of crack tips in the single-crack propagation and multi-crack propagation, and conducts the micro-milling experiments of Ti6Al4V to analyze the wear and cross-sectional morphologies of the CVD diamond coating tool and verify the simulation results. When vertical micro-cracks of coating spread into the interface between the coating and the substrate, stress intensity factor of crack tips is lower than the cemented carbide fracture toughness of 537.6 MPa.mm1/2 and higher than the diamond fracture toughness of 289.7 MPa.mm1/2, and cracks deflect at the interface. When stress intensity factors of crack tips were less than the diamond fracture toughness and cemented carbide fracture toughness in the propagation of the horizontal micro-crack between the coating and the substrate, cracks gradually grow along the interface. After micro-milling experiments of Ti6Al4V, CVD diamond coating micro-tools showed coating delamination, tool-tip breakage, and chipping. The cross-sections of CVD diamond coating micro-tools showed transgranular fracture, intergranular fracture, and micro-cracks. The coating delamination mainly originates from the coating fracture induced by vertical micro-cracks in the coating and the horizontal micro-cracks in the interface between the coating and the substrate. The coating fracture can be inhibited by the competition effect of different vertical micro-cracks in the coating. And the coupling effect between the different horizontal cracks will accelerate the adhesive layer peeling.