Transformations between the tetragonal and monoclinic phases of stabilized zirconia, popularly known as transformation toughening, have been widely studied. The transformation response of these phases to temperature and stress are quite different and hence their transformation response to an environment such as metal cutting, where both temperature and stress effects are involved simultaneously, is of interest. Since any processing may lead to transformations and phase changes, there has been no report on the application of these transformation toughening materials. The present paper deals with the techniques of fabricating a ceramic cutting tool based on ceria stabilized zirconia without phase destruction. The machining performance of this tool in machining cast iron is evaluated and its transformation behaviour in the metal cutting environment is studied. © 1993.