Potassium dihydrogen phosphate (KDP) crystals play an important role in high-energy laser systems, but the laser damage threshold (LDT) of KDP components is lower than expected. The LDT is significantly influenced by subsurface damage produced in KDP crystals. However, it is very challenging to detect the subsurface damage caused by processing because a KDP is soft, brittle, and sensitive to the external environment (e.g., humidity, temperature and applied stress). Conventional characterization methods such as transmission electron microscopy are ineffective for this purpose. This paper proposes a nondestructive detection method called grazing incidence X-ray diffraction (GIXD) to investigate the formation of subsurface damage during ultra-precision fly cutting of KDP crystals. Some crystal planes, namely (200), (112), (312), (211), (220), (202), (301), (213), (310) and (303), were detected in the processed subsurface with the aid of GIXD, which provided very different results for KDP crystal bulk. These results mean that single KDP crystals change into a lattice misalignment structure (LMS) due to mechanical stress in the subsurface. These crystal planes match the slip systems of the KDP crystals, implying that dislocations nucleate and propagate along slip systems to result in the formation of the LMS under shear and compression stresses. The discovery of the LMS in the subsurface provides a new insight into the nature of the laser-induced damage of KDP crystals.