The objective of this paper is to study void evolution and its effects on material failure during the machining process. The influence of cutting conditions on void nucleation, growth and coalescence is studied. The ultimate goal of this approach, as applied to machining, is to predict chip breakage and surface conditions via damage mechanics. A damage mechanics model proposed by Komori  is chosen to study the evolution of the void volume fraction in the chip and workpiece being machined with a grooved tool. A Thomason  type criterion as modified by Dhar et al. , that uses the variables calculated by FEM analysis, is used to predict void coalescence (failure). The distribution of the variables, such as effective strain-rate, nondimensional hydrostatic stress, and effective strain are obtained using the FEM methodology described by Zhang . It is found that void coalescence always occurs in the newly machined surface below the flank face of the tool and in the chip flowing around the chip-groove region near the upper end of the face land. On the other hand, whether void coalescence occurs inside the chip or not, depends on the complex interactions between the machining parameters and chip geometry.