Inconel 718, a nickel, chrome and iron alloy, has special advantages, such as high-temperature strength, thermal resistance and corrosion resistance, which facilitate wide usage in the aerospace industry, especially in the hot sections of gas turbine engines. However, machining this alloy is correlated closely with the material’s inherent properties such as excellent combination of strength, hardness and toughness, low thermal conductivity and the tendency to adhere to cutting tools. This nickel alloy also contains inclusions of hard abrasive carbide particles that lead to work-hardening of the workpiece material and thus abrasive wear of the cutting tool. That is, the machining of Inconel 718 is always influenced by high mechanical and thermal loads. This article reviews the chip formation mechanism of Inconel 718. One of the main characteristics in machining of Inconel 718 is that it will produce serrated or segmented chips in a wide range of cutting speeds and feeds. Existing studies show that the chip serration or segmentation by shear localization affects the machined surface integrity, and also contributes to the chip’s evacuation and the automation of machining operations. Thus, research conclusion indicates that the serrated or segmented chip phenomenon is desirable in reducing the level of cutting force, and detailed analysis of models and approaches to understand the chip formation mechanism of Inconel 718 is vital for machining this alloy effectively and efficiently. Therefore, this article presents some summaries on the models and approaches on the chip formation in machining of Inconel 718.