This paper presents an innovative method for high-speed micro-cutting of carbon fiber reinforced plastics (CFRP). It employs a diamond dicing blade for micromachining applications, with a thickness of about 200 μm and rotational speeds up to 30,000 rpm so as to meet the low-damage surface integrity requirements. The process parameters, cutting damage, surface roughness, and the spindle vibration were thoroughly investigated to evaluate and validate the method. The results indicate that a high cutting speed up to 76 m/s not only remarkably increases the rigidity of an ultra-thin dicing blade, but also decreases the cutting depth per diamond grit to below 10 nm, both of which are very conducive to obtaining a very fine machined surface of about Ra 0.025 μm, with no obvious damage, such as delamination, burrs, and fiber pull out. The serious spindle vibration limits the rotational speed to increase further, and the rotational speed of 25,000 rpm achieves the best fine machined surface. Furthermore, unlike most research results of the drilling and milling method, the proposed micro-cutting method obtains the maximum cutting current and surface roughness when cutting at 0° fiber orientation, while obtaining a minimum cutting current and surface roughness when cutting at 90° fiber orientation. The metal-bonded dicing blade achieves smaller surface roughness than the resin-bonded dicing blade. This paper also discusses the cutting mechanism by investigating the morphology of the machined surface and concludes that the micro breakage and plastic-flow in local regions of fibers and resin are the main material removal mechanisms for dicing CFRP composites with a diamond abrasive blade.