In this paper, an attempt was made to determine the influence of coconut oil (vegetable based oil) on tool-shim interface temperature and the cutting force developed during turning of AISI 304 stainless steel material with coated carbide tool. Experimentation was conducted as per Taguchi’s orthogonal array and the observations were used to conduct the analysis of variance and to perform a graphical analysis. The analysis shows that cutting fluid had some influence on the process parameters and in general coconut oil outperformed the other cutting fluids in terms of reducing the cutting force and tool-shim interface temperature. A mathematical model was developed using Minitab-15 software to predict the cutting force and temperature. Chi-square test was performed to check the validity of the developed model and it was found that there is no significant difference between the predicted and observed value at a significance level of 0.05. © 2010 Inderscience Enterprises Ltd.