An ultrasonic peening-type integrated machining method for cutting and extrusion includes: applying transverse ultrasonic vibration or a vibration component, which is vertical to a cutting speed direction to a cutting tool on a machine tool; setting a cutting parameter and an ultrasonic vibration parameter such that a dynamic negative clearance angle is generated in a cutting procedure and a flank face of the cutting tool conducts ultrasonic peening extrusion on the surface of the workpiece; setting an extrusion overlap ratio; setting a wear standard of flank faces extruded by the cutting tool; controlling a vibration cutting trajectory phase difference of the cutting tool during two adjacent rotations; and turning on the machine tool in order to ensure that cutting and surface extrusion strengthening of the workpiece are completed in one procedure without separate strengthening procedures. The method conducts extrusion strengthening on the surface of the workpiece while cutting the workpiece.