We have investigated the effects of hydrogen implantation temperature on the ion-cut process of InP by examining the correlation between surface blistering and the ion induced damage, hydrogen distribution, and strain. Using Rutherford backscattering spectrometry, elastic recoil detection, and x-ray diffraction, it was found that both the point defects induced by the hydrogen implantation and the in-plane compressive stress were necessary for hydrogen trapping and H-platelet nucleation and growth. The control of implantation temperature is crucial for creating sufficient defects and strain to induce surface blistering or layer exfoliation.