Built-up layer (BUL) formed on the tool rake face during cutting has the tool protective effect. As BUL can change the shape of tool resulting in variation of rake angle and edge radius during cutting, it also has significant influences on the cutting phenomena such as tool wear, cutting forces and surface integrity. SUS304 stainless steel is very difficult to cut, leading to the rapid tool wear and poor surface quality. It also has a high tendency to form BUL during cutting due to its high work hardening rate and high chemical affinity. To actively and purposely utilize BUL, the effects of the size of BUL on the wear of uncoated cemented carbide tools in dry cutting of SUS304 were investigated using experimental and analytical methods in this study. The cutting parameters were chosen to induce the stable BUL formation. After cutting, the worn cutting tools were analyzed using the laser confocal microscopy and scanning electron microscopy. It was confirmed that BUL can reduce the tool flank wear rate in the steady-state wear when its height is equal to or less than the uncut chip thickness. The results also showed that BUL formed at cutting speed 40 m/min can not only reduce the tool flank wear rate but also induce a significant improvement in cutting forces and surface integrity. Meanwhile, using the obtained experimental results and proposed model, simulation was conducted to evaluate the effects of the size of BUL on the tool flank wear formation. It was confirmed that BUL, especially when its height is close to the uncut chip thickness, which reduces the real rake angle to negative, can reduce the normal stress on the tool flank face and lead to a decrease in the tool flank wear rate.