The finite element method was used to model chip formation in orthogonal metal cutting. Emphasis was given on analyzing the effect of important factors, such as plastic flow of the workpiece material, friction at the tool-workpiece interface, and wear of the tool, on the cutting process. To simulate separation of the chip from the workpiece, superposition of two nodes at each nodal location of a parting line of the initial mesh was imposed. According to the developed algorithm, the superimposed nodes were constrained to assume identical displacements, until approaching to a specified small distance from the tool tip. At that juncture, the displacement constraint was removed and separation of the nodes was allowed. Under the usual plane strain assumption, quasi-static finite element simulations of orthogonal metal cutting were performed for interfacial friction coefficients equal to zero, 0.15, and 0.5 and unworn or worn (cratered) tools having a strongly adherent built-up edge. To investigate the significance of the deformation of the workpiece material on the cutting process, elastic-perfectly plastic and elastic-plastic with isotropic strain hardening and strain rate sensitivity constitutive laws were used in the analysis. For simplicity, the tool material and the built-up edge were modeled as perfectly rigid. In all cases analyzed, the cutting speed and depth of cut were set equal to 183 m/min and 1.27 mm, respectively. Experiments confirmed that cutting of AISI 4340 steel with ceramic-coated tools under similar conditions led to the development of a built-up edge and the formation of continuous chips. The dimensions of the crater, assumed in the finite element simulations involving a cratered tool, were also determined from the same cutting experiments. Spatial distributions of the equivalent total plastic strain and the von Mises equivalent stress corresponding to steady-state cutting conditions and the normal and shear stresses at the rake face are contrasted and interpreted qualitatively in terms of critical parameters. The influence of interfacial friction, metal flow characteristics, and wear at the rake face of the tool on the steady-state magnitudes of the cutting forces, shear plane angle, chip thickness, and chip-tool contact length are also elucidated. Several aspects of the metal cutting process predicted by the finite element model agreed well with experimental results and phenomenological observations.