In this study, the performance of groundnut oil as an alternate cutting fluid was compared with that of soluble oil during machining of stainless steel. The temperature at the cutting zone, surface roughness and the chip formation were monitored under the two cutting conditions (soluble oil and vegetable oil). The machining parameters used were cutting speed (75 – 135 rev/min), feed rate (0.01 – 0.05 mm3/mm) and depth of cut (0.01 – 0.08 mm). The experiment was designed using Taguchi orthogonal array of Minitab 18 which generated a 9 run machining parameter mix for the experimentation. The Physiochemical properties of the various fluids were also analyzed to determine the properties and constituent elements of the cutting fluids. The actual machining of the stainless steel bar was done using a Colchester mastiff lathe machine. Results show that feed rate and cutting speed had the most significant effect on surface roughness during machining of stainless steel both with groundnut oil and soluble oil. Soluble oil was a better coolant but poorer in lubrication as vegetable oil reduced surface roughness more when used. Surface roughness value improved from 9.21μm during machining with soluble oil to 3.84μm during machining with groundnut oil which represented a 58.3% improvement. Hence, vegetable oil is therefore recommended as good alternative cutting fluid to soluble oil during machining of stainless steel.