Chemical mechanical polishing (CMP) is a crucial manufacturing process for diamond substrate applications. However, due to the extremely high hardness and chemical stability of diamond, its CMP efficiency is extremely low. This study aims to achieve microscopic simulation of atomic oxidation removal at the three-phase interface between diamond abrasive particle, diamond substrate, and hydroxyl free radicals (∙OH) aqueous solution. The mechanical activation behavior, microscopic mechanism, and feasibility of elementary reactions in the ∙OH aqueous solution environment was studied using various perspectives of radial distribution function, central atomic coordination state, atomic bonding and removal forms, energy, electron orbitals, and density functional theory (DFT). The simulation results indicate that during the process of diamond atomic oxidation removal, the atomic density at the first adjacent position centered on one atom decreases, and the stable covalent bond structure is disrupted, resulting in an amorphous phase transition. The chemical adsorption reaction generates C-O and C–H bonds. The C atoms mainly separate from the diamond substrate by the forming products such as carbon monoxide (CO), carbon dioxide (CO2), and carbon chains. The mechanical activation behavior indirectly reduces the activation energy of chemical reactions, while increasing the absolute value of adsorption energy and improving the ability of chemical adsorption solution atoms H and O, as well as ∙OH groups. Based on DFT, it has been verified that the intrusion process of ∙OH groups in the elementary reactions involving the typical product C*O2 is an exothermic reaction that can occur spontaneously, and the energy barrier needs to be overcome by the mechanical action of abrasive particles. At the same time, the energetics of the oxidation of diamond C atoms to generate C*O2 have successfully confirmed that the combined action of ∙OH and diamond abrasive particles is expected to achieve efficient oxidation removal and finishing polishing of diamond atoms.