In today’s manufacturing, cutting fluid systems are widely used in modern machine tools to improve the process performance. The influence of cutting fluids on the specific cutting force components as well as the resulting heat distribution is a complicated physical phenomenon, which is difficult to experimentally investigate due to the restricted optical accessibility in the machining process. To better understand the working principle of the cutting fluid system, a three-dimensional fluid-structure interaction simulation approach for orthogonal cutting processes was developed in this work. The simulation approach overcomes the underestimation of the fluid velocity perpendicular to the cutting direction in conventional two-dimensional simulations and allows a more accurate resolution of the flow behavior in the cutting zone. This method provides a detailed investigation of the mechanical effect of the coolant jet on the chip formation process. To evaluate the simulation results, orthogonal cutting experiments were conducted on a lathe under both wet and dry conditions. The comparison of chip shapes between simulation and experiment shows that the three-dimensional model can accurately predict cutting fluid induced chip breakage. Furthermore, the simulative investigation showed that chip formation is strongly dependent on the orientation of the nozzle jet. This result provides first findings for improving chip removal by varying the coolant supply parameters.