Ultrasonic assisted grinding (UAG) is considered an effective method for machining ceramic matrix composites (CMCs). However, the intense dynamic mechanical loads encountered during machining, along with the property disparities among fiber, matrix, and interface, increase both the uncertainty of UAG process and the difficulty in analyzing the material removal mechanism. In this study, the mechanisms underlying ultrasonic vibration were revealed via dynamic mechanical response of SiCf/SiC composites and energy dissipation principles during machining for the first time. Through experiments with conventional grinding (CG) and UAG, it is discovered that UAG exhibits superior machining performance compared to CG, with reduced surface/subsurface damage, lower grinding forces, and decreased surface roughness. Moreover, UAG effectively minimizes discrepancies among different fiber orientations. Combining the results of dynamic mechanical response and energy dissipation model for chip fragment formation, it is found that the high strain rate induced by ultrasonic vibration promotes the embrittlement of composites. This is manifested by the increased nucleation of microcracks in both fibers and matrix, which inhibit the propagation of interfacial cracks and long cracks. Consequently, the removal modes of fibers, initially through bending or shear fracture, and matrix, initially through breakage, both transition to a pulverization mode. These transitions weaken the interfacial, heterogeneous, and anisotropic effects during machining, thereby achieving high-quality processing of SiCf/SiC composites. This study enhances the understanding of surface formation and material removal mechanisms. Moreover, it confirms the feasibility of using dynamic mechanical response and energy dissipation principles to investigate material removal mechanisms in the machining of CMCs.