The Chipped Anvil is a damaged variant of the Anvil that functions identically but has reduced durability. It appears after an Anvil takes damage from use. A Chipped Anvil cannot be crafted but is obtained when a regular Anvil takes durability damage. Each time an Anvil is used, there is a 12% chance that it will become damaged, transitioning from a normal Anvil to a Chipped Anvil and eventually to a Damaged Anvil before breaking completely.

Like a regular Anvil, a Chipped Anvil can be used to repair items, rename tools and equipment, and combine enchantments. The experience cost for these actions depends on the item's previous modifications and enchantments. A Chipped Anvil follows gravity and will fall if the block beneath it is removed, dealing heavy damage to any entity it lands on. It can be mined with any tool, but pickaxes break it the fastest.