A study has been made of the wear characteristics of CBN tools in the dry and wet finish machining of M2 tool steel, heat treated to a hardness of 60–62 Rc. The repeatability of CBN tool flank wear, the Taylor tool life exponent for CBN tools, the effect of coolant on tool wear and tool life, and the variation of component surface finish and cutting forces with tool wear have been measured. It is found that the evolution of tool wear is very repeatable, the Taylor tool life exponent for CBN tools is 0.26 in dry finish machining and that the use of a coolant leads to a 20–25% increase in tool life. The variation of surface finish with flank wear is also observed to be qualitatively similar in multiple cutting experiments carried out at the same conditions in dry and wet machining. The machining forces show a steady increase with flank wear with the radial force showing the greatest increase. The specific cutting energy for the CBN finish machining of M2 steel has been estimated and it is found to be about 10 times smaller than the specific grinding energy.