Abstract: The conventional rotary rock breaking method faces a technical bottleneck in improving the rate of penetration (ROP) in deep hard formations. Percussive drilling is the most potential approach to increase rock-breaking efficiency and ROP. However, the rock-breaking mechanism of percussive drilling is still unclear enough, especially the micro-fracture mechanism of rock under confining pressure (under lateral pressure and hydraulic pressure). In this paper, the impact rock breaking experiments by four kinds of Polycrystalline Diamond Compact (PDC) cutters are carried out using a drop-weight impact testing machine and an acoustic emission (AE) recording system, the influence of parameters such as cutter shape, rake angle, and impact energy on rock-breaking are systematically analyzed. This study includes a numerical simulation to examine the process of crack initiation, propagation, and cuttings formation during the impact process with the consideration of confining pressure. The results show the conical-shaped cutter is the most aggressive with high breaking efficiency. The penetration depth of the cutter is mainly influenced by the impact energy and cutter shape than the rake angle of the cutter. There exists critical impact energy makes the rock breaking efficiency the highest. The critical impact energy is about 40 J when using the conical-shaped cutter with a rake angle of 15°. The rock mainly failed in tensile mode, and the inter-grain crack is the main crack. Hydraulic pressure can inhibit the formation of horizontal cracks, while lateral pressure can inhibit the formation of vertical cracks and reduce the proportion of tensile cracks. The research results can provide some reference and basis for improving the rock-breaking efficiency in deep hard formations.