The Zirconia toughened alumina (ZTA) is the commonly used cutting tool material as it has superior mechanical properties. However, the poor tribological properties made it not suitable for dry machining. Various researchers added many additives to ZTA base tool to machine different workpiece materials for use in various applications. Still, it experiences many difficulties at various cutting speeds during machining. To overcome this, a novel composite tool was fabricated in the present study by adding the following self-lubricating elements such as, NiCr, Ag, Mo, SrSO4, and CaF2. The cutting performance was investigated by comparing the self-lubricating cutting tools (SLTs) with the base tool regarding cutting force, coefficient of friction, and surface roughness. The results showed that the addition of SrSO4 and Mo at 10 wt.% and CaF2 at 5 wt.% obtained superior mechanical and tribological characteristics. The generation of the following phase, viz., MoO3, Mo4O11, and Ag2MoO4, CaMoO4, and CaSO4, are responsible for the better performance. The additives restrained the transformation of t-ZrO2 to m-ZrO2 resulting in improved hardness and wear characteristics leading to strong protection of the self-lubricating layer formed on the tool flank surface, causes for performance improvement. The wear of the SLTs is primarily dominated by abrasion and adhesion, whereas the base tool is dominated by abrasion, adhesion, chipping, and cracking.