Despite its unparalleled success in the field of surgery, the precise mechanism of ultrasonic phacoemulsification cataract extraction remains controversial. We review the relevant peer-reviewed literature on the subject of power generation and tip-tissue interactions to clarify the current status of our knowledge. We conclude that phacoemulsification most likely operates by a combination of mechanisms, including direct action of the vibrating tip against tissue and indirect cavitational effects. Surgeons will benefit from understanding the physical principles underlying phacoemulsification because they will be better able to evaluate the performance of various parameters and different machine settings.