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In the present paper, the machinability tests were conducted by using various processing parameters on a CA6164 lathe with a dynamometer. The metallurgical properties, machinability and mechanical properties of the developed alloy were compared with those of an austenite stainless steel 1Cr-18Ni-9Ti. The results have shown that the machinability of the austenitic stainless steels with free-cutting additives is much better than that of 1Cr-18Ni-9Ti. This is attributed to the present of machinable additives. The inclusions might be composed of MnS. Sulfur and copper addition contributes to the improvement of the machinability of austenitic stainless steel. Bismuth is an important factor to improve the machinability of austenitic stainless steel, and it has a distinct advantage over lead. The mechanical properties of the free cutting austenitic stainless steel are similar to that of 1Cr-18Ni-9Ti. A new Pb-free austenitic stainless steel with high machinability as well as satisfactory mechanical properties has been developed.