This paper reports the development of a cutting tool insert prepared by consolidation, followed by Spark Plasma Sintering (SPS) of TiB2 (Titanium diboride) particles processed through an in-situ reaction and AlN (Aluminium nitride) manufactured by the direct nitridation process. Insitu TiB2 particles, formed during reaction of KBF4 (Potassium tetra Fluoroborate) and K2TiF6 (Potassium Fuorotitanate) with Al alloy, are obtained by dissolving the Al-TiB2 composite in an acidic medium. The extracted TiB2 (30%) particles are blended with AlN and Al2O3 in the weight ratio of 67%-3% and sintered (SPS) at 1440ºC with a compaction load of 50 MPa and a total sintering time of 8 minutes. The sintering is carried out in vacuum. The sintered ceramic displays high hardness of nearly 15.5 GPa and extraordinary toughness of 7MPa.m1/2. The inserts are manufactured according to SNGN (Square Double-sided ceramic) configuration. To study its performance, machining is carried out on hardened steel (EN 24). The developed AlN based inserts show increased wear resistance and provide good surface finish when compared with commercially available ceramic inserts (70%Al2O3+30%TiC). Cutting forces are recorded with a Kistler® dynamometer to correlate them with the tool wear. Methods of preparation and comparison of wear resistance and surface finish of the machined material with those pertaining to commercial ceramic inserts are also presented. SEM images are displayed, which support the results. © (2015) Trans Tech Publications, Switzerland.