Leaded free-machining steel is used in production industry. However the use of the leaded free-machining steel is limited from an environmental problem. So sulfurized free-machining steel, not include lead, has been researched widely. In order to improve the machining performance of the sulfurized free-machining steel, it is necessary to find out the behavior of inclusion. The experiment was carried out to find out the mechanism of the surfurized inclusion on the machinability, using some kinds of materials which were changed the size of the inclusion. In orthogonal cutting, the deformation behaviors of the sulfurized inclusion in the work materials were observed in the vicinity of tool face. Cutting forces were also measured and finished surfaces were observed. Besides, low speed orthogonal cutting in Scanning Electron Microscope (SEM) which was mounted a small cutting device was carried out in order to observe the deformation behavior more microscopically. As a result, it is clear that some inclusions creates voids around them and some broke to several pieces depending on their conditions. Moreover, in order to investigate the formation and growth of BUE, a quick stop experiment was done during turning. As a result, it is clear that the larger inclusions can reduce the formation of BUE.