A new biomass comminution system, Crumbler rotary shear, was developed to process fuel-grade biomass. The rotary shear is more efficient than the traditional hammer mill in comminuting high-moisture biomass and producing more uniform particles with minimal fines. However, the milling unit experiences significant wear in processing dirty woodchips. This study investigated the wear mechanisms of the rotary shear system based on analysis of the minerals carried by woodchips and characterization of actual worn components. Abrasive wear was found to be the dominant effect, and localized adhesive wear (material transfer), microfracture (chipping), and plastic deformation were additional effects. Connections have been made between the wear progression of key cutting components and the particle size change of biomass extrinsic minerals. On the basis of the wear mechanism understanding, mitigations based on advanced tool materials and optimized tool geometric designs are being developed for improving the tool life and cutting efficiency.