The chip formation process in machining is accompanied by heat generation, which influences the mechanical and physical properties of both workpiece and cutting tool such as surface roughness and tool life. High temperatures tend to accelerate thermal softening of the tool and subsequently lead to tool wear, which are not desirable because they negatively impact the accuracy of the machined surface and tool life. There are many approaches to minimize the impact of heat generation on tool life in metal cutting. The first approach is to use a cutting fluid but its effectiveness is limited by its ability to penetrate between the tool and the chip and the use of cutting fluids is now being questioned regarding health terms. One novel approach is to remove the heat generated through a cooling cycle using in interrupted cutting. The idea is to either translate a wide tool to the side as it moves forward relative to the workpiece, which allows for dissipation of heat throughout the body of the tool. Rotary tool machining is a cutting process in which the cutting edge of a round insert rotates about its axis, so that a continuously indexed cutting edge is fed into the cutting zone. Compared to a conventional stationary tool or non-rotating circular tool, rotary tool allows each portion of the cutting edge to be cooled between engagements and makes use of the entire circumference of the edge. Insert rotation can be either externally driven (Driven Rotary Tool) or generated by a self-propelling action induced by chip formation (Self-Propelled Rotary Tool). In this thesis a comprehensive study has been done on the previous works on cutting tools and rotary tools. According to the results of previous researches and our evaluations, a new driven rotary tool with the unique capabilities designed and manufactured as the cutting tool. Primary tests were done on the tool and then the parameters and their levels were determined. The parameters are cutting speed, feed rate and inclination angle and the effect of the parameters on surface roughness is evaluated. For each parameter three levels were determined. Design of experiment was done by use of the full factorial design and the modeling is done by using of neural network and Matlab software. The result shows that with increase in the cutting speed the surface roughness decrease. As inclination angle increases the surface roughness decrease and with increase in feed rate the surface roughness increase. The thesis also presents a comparison of driven rotary tool, self-propelled rotary tool and fix tool in machining of the St-37 by use of three insert. Results show that build of edge on fixed tool edge has the highest height and in self propelled rotary tool is higher than driven rotary tool. It was also observed that there are some cracks on fixed tool rake face and there were not any crack on self propelled and driven rotary tool rake face. Keyword Driven rotary tool, Rotary speed of the insert, Inclination angle, Cutting speed, Surface roughness.