Potassium dihydrogen phosphate (KDP) crystals are widely used in high-power laser systems and inertial confinement fusion applications. However, machining KDP crystals using ultra-precision fly-cutting technology poses challenges due to the combined elastic, plastic, and brittle deformation mechanisms, making it difficult to analyze the material removal process. This investigation aims to observe and analyze the elastoplastic behavior of KDP crystals in the ductile region, which has received limited attention in previous studies. Nanoindentation experiments were conducted to analyze the elasto-plastic transition in KDP crystals, employing an approach instead of the traditional Oliver–Pharr method. Additionally, a cutting experimental method was developed to observe the reverse behavior during manufacturing by introducing a process with a 0 nm depth of cut. The results reveal significant rebound deformation and anelastic behavior, providing a comprehensive understanding of the deformation mechanism in KDP crystals at the nano- and micro-scale cutting levels. This knowledge contributes to modifying the diamond turning process and optimizing the fabrication procedure of KDP crystals.