With the development of MMCs, the mechanical properties of MMCs with small volume fraction of nanosized particles were found to be even superior to that with larger content of micron-sized particles. However, the improved mechanical properties of MMCs bring tremendous challenges such as premature tool failure Tiin machining process. This study exhibits an investigation on tool wear in micro milling of magnesium based MMCs reinforced with 1.98 Vol.% of nano-sized titanium particles using 0.5mm diameter two-flute tungsten carbide micro endmills. The tool wear was characterised both quantitatively and qualitatively by observing tool wear patterns and analysing the effect of cutting parameters on flank wear, reduction in tool diameter, cutting forces, surface roughness, and burr formation. A finite element model was established to understand matrix deformation and interaction between tool-particle and further explain the tool wear phenomena observed. Additionally, cutting performance using AlTiN coated and uncoated was also investigated. The results indicated that the main wear mechanisms were identified as flank wear and edge chipping due to abrasive wear and chip adhesion in uncoated micro endmills. These wear mechanisms were confirmed by chip formation process produced by finite element modelling (FEM). It was also observed that the largest tool wear was occurred at smallest feed per tooth (0.75µm/tooth) and smallest wear was 2 occurred at largest feed per tooth (3µm/tooth). Also, the effect of BUE on tool wear and surface generation was studied.