It is evident that machining process causes development of large quantities of thermal energy within a relatively narrow area of the cutting zone. The generated thermal energy and the problems of its evacuation from the cutting zone account for high temperatures in machining. These increased temperatures exert a pronounced negative effect on the tool and workpiece. This paper takes a different approach towards identification of the thermal process in machining, using inverse heat transfer problem. Inverse heat transfer method allows the closest possible experimental and analytical approximation of thermal state for a machining process. Based on a temperature measured at any point within a workpiece, inverse method allows determination of a complete temperature field in the cutting zone as well as the heat flux distribution on the tool/workpiece interface. By knowing the heat flux function, one defines criterium and method of optimization, the inverse heat transfer problem transforms into extreme case. Now, the task of optimization is to determine most favourable ratio between heat flux parameters in order to preserve exploitation properties of the tool and workpiece.