Despite significant advances in materials in the past 30 years, breakthroughs in cutting tool materials for ferrous metals have been limited since the introduction of tuingsten-carbide cobalt (WC-Co) materials early in this century. WC-Co is a compositional compromise between the hardness of the carbide phase, and the ductility of the (Co) Cobalt. This compromise becomes a burden as industry continues to seek improved efficiencies, push the bounds on alloy properties, and develop new manufacturing practices. In particular, the Co phase limits the usefulness of the tool due to loss of hardness at high temperatures. Ceramic composites should technically provide the appropriate properties for improved cutting tools, and in fact, are used already in specific applications. However, the available materials are either unreliable due to poor damage tolerance, or limited due to reactivity of with ferrous alloys. A new ceramic material has been identified that exhibits significantly improved damage and corrosion tolerance. We propose that a composite of this material with a hard carbide phase represents a revolutionary new concept for an essentially all-ceramic cutting tool. The Phase I program will support composite preparation, characterization, and comparative machining evaluation alongside commercial WC-Co materials. Phase II will support composite refinement, properties evaluation, and application development.