The purpose of this paper is to monitor the tool wear based on the image data of cutting tool in the face milling operation. The surface images of the different coated inserted blade cutters are captured using a machine vision system incorporating with the mutual information and image similarity analysis technique for processing the images. The milling test is designed by using Taguchi’s method. The experimental results indicate that the coating layer factor is recognized to make the most significant contribution to the over all performance. The TiAlN-surface multilayer coated inserted blade cutter has the least wear rate amongst these coated milling cutters and has the longest tool life in this experiment.