Dual-phase steels have been used primarily for reducing weight of complex shaped automotive parts which could not be made with less formable, conventional high strength steels. Recently, a microalloyed dual-phase steel was found also to possess superior machining characteristics. This paper describes laboratory data which compare machinability of dual-phase steel with that of conventional steels. The effects of material strength, tensile prestrain, and cutting depth on machined surface quality are elucidated. The improved machinability of dual-phase steel was explained on the basis of its unique micro-structure. In addition, two applications of dual-phase steel are discussed. In one application, broaching is the critical machining step, and dual-phase steel is currently used in production. In the other, turning is the critical step, and further studies are under way.