The objective of this paper is to introduce an applied systems approach for prediction and optimization of machining performance. Current techniques for assessing machining performance are highly localized and traditionally biased towards the work material. An integrated systems approach is proposed for a reliable and consistent assessment of applied machining performance (AMP). Three areas, namely: fundamental modeling, applied modeling and optimization, are focused on. Fundamental modeling entails generic predictive models for machining performance measures (cutting forces/torque/power, tool-wear/tool-life, chip form/chip breakability, surface roughness/surface integrity, part accuracy, etc.). Applied modeling involves application of the generic models to a specific machining system, including the interactions of the three major elements: workpiece, machine tool and cutting tool. The subsequent step of optimization predicts the optimized machining performance (OMP).