The processes and mechanism of removing oil and water from aluminum chips were clarified through thermogravimetric analysis (TGA), scanning electron microscopy (SEM), response surface method (RSM) and molecular dynamics (MD). The results indicate that the cutting fluid loses mass obviously at 200-300 °C and is carbonized above 400 °C. A layered arrangement of water-surfactant-oil is formed. There are strong hydrogen bonds, strong and weak van der Waals (vdW) forces between O—H in surfactant and O atom in water at 1.63, 3.27 and 5.05 ？, respectively. With the increase of temperature, the weak interaction vdW force is vanished, and the hydrogen bond is reduced. The strong vdW force and hydrogen bonds are broken and the layered arrangement of water-surfactant-oil interface is unstable and destroyed above 277 °C. The removal rate of water and oil is up to 99.7% when the chips are heated at 370 °C for 70 min with 3 cm loading thickness.