The formation of serrated chip in hard turning and tool life and the quality of the machined surface are closely related. Simulation experiments of hard turning hardened bearing GCr15 steel (62HRC) were conducted using finite element simulation software ABAQUS. According to chip morphology, combined with cutting force and temperature field, the formation process and mechanism were researched  and conclusions were obtained. Firstly, continuous chip is formed under relatively lower cutting speed (60 m/min), while under a higher speed of 181 m/min, serrated chip is formed with adiabatic shear band. The thermal softening effect of adiabatic shear band declines in the carrying capacity, and in turn results in fluctuates of cutting force. Secondly, under 181 m/min, micro-cracks appear on the connected surface between the workpiece and the chip and they extend along the adiabatic shear band to some extent. This not only makes the saw-tooth more apparent and results in “The 2th-Drop” of cutting force but also delays the formation of the next saw-tooth block. Thirdly, for hard turning hardened GCr15 steel, adiabatic shear theory is a precondition to form saw-tooth chips. The appearance and extension of the periodic microcracks are also based on the ductile fracture of the shear adiabatic effect.