Carbide cutting surfaces are often useful when machining through materials such as carbon steel or stainless steel, as well as in situations where other tools would wear away, such as high-quantity production runs. Sometimes, carbide will leave a better finish on the part, and allow faster machining. Carbide tools can also withstand higher temperatures than standard high speed steel tools. The material is usually tungsten-carbide cobalt, also called "cemented carbide", a metal matrix composite where tungsten carbide particles are the aggregate and metallic cobalt serves as the matrix. The naturally ductile cobalt metal serves to offset the characteristic brittle behavior of the tungsten carbide ceramic, thus raising its toughness and durability.

Machining with carbide can be difficult, as carbide is more brittle than other tool materials, making it susceptible to chipping and breaking. To offset this, many manufacturers sell carbide inserts and matching insert holders. With this setup, the small carbide insert is held in place by a larger tool made of a less brittle material (usually steel). This gives the benefit of using carbide without the high cost of making the entire tool out of carbide. Most modern face mills use carbide inserts, as well as some lathe tools and endmills.

To increase the life of carbide tools, they are sometimes coated. Four such coatings are TiN (titanium nitride), TiC (titanium carbide), Ti(CN) (titanium carbide-nitride), and TiAlN (Titanium Aluminum Nitride). (Newer coatings, known as DLC (Diamond Like Coating) are beginning to surface, enabling the cutting power of diamond without the unwanted chemical reaction between real diamond and iron.) Most coatings generally increase a tool's hardness and/or lubricity. A coating allows the cutting edge of a tool to cleanly pass through the material without having the material gall (stick) to it. The coating also helps to decrease the temperature associated with the cutting process and increase the life of the tool. The coating is usually deposited via thermal CVD. However if the deposition is performed at too high temperature, an eta phase of a Co₆W₆C tertiary carbide forms at the interface between the carbide and the cobalt phase, facilitating adhesion failure of the coating.