Manufacturing processes, such as machining, can produce residual stresses in products. Residual stress and its distribution can be the main factor influencing the fatigue life of machined components and has already been the subject of many experimental and numerical studies. The high-temperature condition, as a result of machining, makes a change in the microstructural properties of the material and consequently affect the mechanical properties of the workpiece. A major metal component of aircraft structure and engine components is nickel-based alloys due to their resistance to heat, corrosion, thermal fatigue, thermal shock, creep, and erosion. When these critical structural components in the aerospace industry are manufactured with the objective to reach high-reliability levels, surface integrity is one of the most relevant parameters used for evaluating the quality of finish-machined surfaces. The residual stresses and surface alterations including white layer, depth of work hardening, micro-cracks, and oxidation induced by machining of nickel-based alloys are extremely critical due to safety and sustainability concerns. Integrated Computational Materials Engineering (ICME) links physics-based models to predict the performance of materials based on their processing history. The Johnson–Mehl–Avrami-Kolmogrov (JMAK) model is used to develop a microstructure-based modeling approach that takes into account dynamic recrystallization (DRX) that causes grain size changes. Allied with that, a grain size parameter on the flow stress behavior of the material is considered by adding a grain size-dependent term to the traditional Johnson–Cook (JC) model as a novel framework. The impact of the simulation of the orthogonal cutting process is implemented in a finite element method (FEM) model–based commercial software, ABAQUS-explicit, with a coupled Euler-Lagrangian (CEL) approach. By relying on the VUHARD user subroutine capabilities with Fortran language, ABAQUS-explicit can be steered to model the material behavior considering the term of DRX. The forecast capability of the developed model is assessed by comparison of the results by changing the depth of cut and cutting edge radius effect on the residual stress. Then, the correlation between the grain size evolution and temperature distribution by changing the cutting velocity is investigated.