Micro-milling technology is widely used in the manufacturing of micro three-dimensional complex parts in aerospace, mechanical equipment, biomedical devices, electronic components, and other fields due to its advantages of high machining accuracy, small size, and complex surface. Consequently, understanding its machining process is essential. This study proposes a time-varying dynamic micro-milling process model with the effects of tool runout, tool wear, and cutting status and explores the stable cutting domain of real-time machining. Considering the time-varying characteristics of the cutting process, combined with measured data and particle filtering method, the cutting force coefficients and tool wear parameters in the dynamic model at different times are identified. The dynamic equation of micro-milling is derived using a discrete method, and the stability of the cutting process is evaluated. Multiple cutting experiments are conducted on the Al6061, and the test data are compared with simulated values. The comparison results show that the accuracy of the proposed model in predicting the cutting state can reach 100%, and the average error of cutting force prediction is 7.72%. The research results can provide theoretical guidance for the safety evaluation of micro-milling and the selection of machining conditions.