Tip-based nanomachining (TBN) approaches has proven to be a powerful and feasible technique for fabrication of microstructures. The molecular dynamics (MD) simulation has been widely applied in TBN approach to explore the mechanism which could not be fully revealed by experiments. This paper reviews the recent scientific progress in MD simulation of TBN approach. The establishing methods of the simulation model for various materials are first presented. Then, the analysis of the machining mechanism for TBN approach is discussed, including cutting force analysis, the analysis of material removal, and the defects analysis in subsurface. Finally, current shortcomings and future prospects of the TBN method in MD simulations are given. It is hopeful that this review can provide certain reference for the follow-up research.