Nanoindentation tests were made on single-crystal InP at various loads using a pyramid-type diamond indenter, and the resulting indents were examined using SEM and TEM. The results suggest that dislocations along the <110> directions dominate the deformation mechanism, where no phase transformation occurs. Indentation caused high-density dislocation regions below which are slip bands. The indentation mechanism was simulated by finite element method (FEM), and the simulation results were compared with the experimental results. Diamond turning experiments were also conducted to examine the ductile machining characteristics. The surface texture was found to change significantly with workpiece crystal orientations. The critical undeformed chip thickness for completely ductile-cut surfaces was measured and smooth surfaces were obtained with generating continuous ductile chips.