Grinding hardening can obtain hardening effect besides fine machining effect on the surface of workpiece. A certain degree of surface micro-damage will be formed during grinding hardening process which mainly contains micro-crack, melting coating, decarburization, and surface scratch. In order to study the micro-damage of grinding hardening, the paper carries on a grinding hardening experiment and the characteristics of micro-damage are observed. The generation mechanism of micro-crack is revealed. It is formed by the accumulation of dislocation pile-up in the condition of grinding hardening process. When the grinding depth reaches a certain value, the surface micro-crack will be produced obviously and become more serious with the increasing of grinding depth. Other micro-damage containing surface melting coating, decarburization, and surface scratch are also studied and their relevance with micro-crack is revealed. Based on the grinding hardening theory and pile-up dislocation theory, a model for micro-crack of grinding hardening is established. The calculating result of the model accords with the experimental result in general.