This study investigates the polycrystalline diamond (PCD) tool's wear mechanism and the effect of tool wear on hole morphology in the micro-drilling of Cf/SiC composites. A 2D woven material model and tool wear model are created for the drilling simulation. The findings indicate that the wear mechanisms of the tools are mainly abrasive and adhesive. As the tool is worn, the quality of the hole entrance/exit and the shape accuracy deteriorate, and the surface roughness of the hole wall increases. Furthermore, a blunt cutting-edge radius shifts material removal from a shear effect to a compressive effect, transitioning from micro-brittle to macro-brittle removal. Notably, the simulation results approximately agree with the experimental results.