ZrO2 ceramics are commonly known as 'hard and brittle' materials due to their exceptional properties, such as high hardness, heat resistance, chemical stability, and low thermal conductivity. However, the hole processing technique for ZrO2 ceramics often results in significant tool wear and compromises the quality of the holes. This study investigates the removal mechanism of ZrO2 ceramic materials by using carbide tools, diamond-coated carbide tools, and micro-sintered tools. It also analyzes the impact of processing parameters on the wear mechanism of different tools and the quality of hole processing in ZrO2 ceramics. The findings revealed that at high spindle speed (8000 r/min) and low feed rate (1 mm/min), the diamond coating on the rake surface of the diamond-coated carbide tool tends to peel off, leading to the formation of sharp edges on the flank surface. This phenomenon results in a reduction in thrust forces. Moreover, it is observed that as the number of hole machining operations increases, the peeling of the diamond coating on the tool flank becomes more severe. The increase in feed rate causes the diamond coating peeling area on the rake face of the tool to expand toward the chisel edge and even reach the thinned edge area near the chisel edge. When the feed rate of carbide tools increases, the wear degree of the chisel edge gradually increases, while the wear degree of the main cutting edge corner position gradually decreases. At low spindle speeds, the main cutting edge breaks and the cutter head is also damaged and deformed. The main wear mechanisms of micro-sintered tools involve shedding, fragmentation, wear, and adhesion of diamond abrasive grains. The bottom surface of the tool tends to accumulate a significant amount of flaky adhesion, which dulls the tool and increases thrust force. In contrast to carbide tools, diamond-coated carbide tools offer improved hole exit quality. However, micro-sintered tools often exhibit large volumes of flaking at the hole exits, resulting in shell-like stripes on the peeled surface.