The paper describes the properties of two new medium-carbon free-machining alloy structural steels. These steels are environmentally friendly since lead in them is replaced with much less harmful elements bismuth and calcium. Bismuth and calcium are rather uniformly distributed in the ingot, though there are two zones of bismuth heterogeneity in the bottom and in the head part of the ingot. Mechanical properties of steels are at the same level as for steels without bismuth and calcium. Non-metallic inclusion content is typical for structural steels melted in open electric arc furnaces with basic lining and is not changed by the presence of bismuth and calcium. Machinability of the steels with bismuth and calcium is at the same or higher level than that of lead-bearing steels. Melting, casting, forging and rolling of steel containing bismuth and calcium is not associated with working area air-pollution with harmful substances in amounts exceeding maximum permissible concentrations. During rolling of the lead-free steels harmful emissions are almost absent, unlike the lead-bearing steels.