This paper presents a review of the state-of-art research on surface integrity characterization, especially the characteristics of residual stresses produced in machining of hardened steels, titanium and nickel-based superalloys using the geometrically defined tools. The interrelationships among residual stresses, microstructures, and tool-wear have been discussed. Current research on residual stress modeling and simulation using finite element method has been critically assessed. Also, the rationale for developing multi-scale simulation models for predicting residual stresses in machining has been presented. At the end, possible future work has been proposed.