Free-cutting phosphor bronze alloy (ASTM C54400) was used as a material for automotive parts and industrial valve parts for its high strength, machinability and excellent corrosion resistance. To obtain desired mechanical strength of the alloy, the process parameters including continuous casting speed, reduction in area and annealing temperature have to be controlled. In this study, we investigated the effect of annealing on the mechanical property and machinability of free-cutting phosphor bronze alloy fabricated by continuous casting with different casting speeds of 80, 100, and 120 m/min, respectively. After annealing, the tensile strength of the alloy decreased with increasing annealing time owing to the occurrence of recrystallization and grain growth. In the cast and swaged alloy produced at casting speed of 120 m/min, the grain growth occurred rapidly. In contrast, in the alloy produced at the casting speed of 80 m/min, the grains growth rate was low. Furthermore, the effect of Pb particle in the alloy on machinability was also investigated by using a tool dynamometer installed force sensor.