Recently, orthogonal cutting has been exploited as a means for producing ultrafine grained (UFG) and nanocrystalline microstructures for various metal materials, such as aluminum alloys, copper, stainless steel, titanium and nickel-based super alloys, etc. However, no predictive, analytical or numerical work has ever been presented to quantitatively predict the change of grain sizes during plane-strain orthogonal cutting. In this paper, a dislocation density-based material plasticity model is adapted for modeling the grain size refinement mechanism during orthogonal cutting by means of a finite element based numerical framework. A coupled Eulerian–Lagrangian (CEL) finite element model embedded with the dislocation density subroutine is developed to model the severe plastic deformation and grain refinement during a steady-state cutting process. The orthogonal cutting tests of a commercially pure titanium (CP Ti) material are simulated in order to assess the validity of the numerical solution through comparison with experiments. The dislocation density-based material plasticity model is calibrated to reproduce the observed material constitutive mechanical behavior of CP Ti under various strains, strain rates, and temperatures in the cutting process. It is shown that the developed model captures the essential features of the material mechanical behavior and predicts a grain size of 100–160 nm in the chips of CP Ti at a cutting speed of 10 mm/s.