Impregnating resin into the open pores of a sintered iron compact is well known to improve the machinability of the compact. However, the causes of this phenomenon require further investigation. The purpose of this study is to clarify the main cause of the improvement in machinability on resin impregnation. In this study, sintered iron was machined and the influences of resin impregnation on its thermal properties, coefficient of friction, and flow stress (deformation resistance) were investigated. The results indicate that the great improvement in machinability produced by resin impregnation is mainly due to a reduction in the plastic deformation (fracture strain) for chip generation, lowering the degree of work hardening and consequently reducing the cutting force required.