This research focuses on enhancing the machinability and formability of tool steels by applying different heat treatment scenarios. Machinability is the process of cutting metals with the least energy effort, while formability is the ability of a metal to be shaped into different forms without severe damage. Enhancing machinability and formability improves dimensional tolerance and surface finish and increases the lifetime and reliability of tool steels. This research will use two tool steel materials, “D2” and “O1,” which are widely used in industry. They contain high percentages of carbon by weight (1.55% and 0.95%, respectively). The “O1” tool steel is used in blanking dies and room-temperature cutting tools, whereas the “D2” tool steel is used for carpentry cutting tools and gauges. The different heat treatment scenarios are based on the latest literature, which shows excellent results with other materials. The heat treatment plan is set to cover various scenarios to determine the most effective treatment for machinability and formability. The experimental work will include several mechanical tests: tensile tests, compression tests, hardness tests, and toughness tests. The conclusions regarding the different heat treatments will be based on the test results.