As is well known, excessive chemical tool wear occurs when steel alloys are machined with monocrystalline diamond tools prevents many important applications. In order to reduce this catastrophic tool wear, certain process modifications have been proposed in the literature, e.g. cryogenic cutting and elliptical vibration cutting. Another approach for realizing precision machining of steel is coating the diamond with a TiN layer or using ceramic tools. However, only elliptical vibration cutting has proven to be ready for industrial use, but a large amount of auxiliary equipment is needed. The basic idea of the new approach is to avoid chemical reactions between the carbon of the diamond tool and the iron of the substrate by establishing a chemical bond between the iron and other chemical elements in the workpiece's subsurface layer. Using a custom-made thermo-chemical process for altering the chemical composition of the boundary layer of the workpiece the diamond tool wear can be reduced by more than two orders of magnitude. The surface roughness obtained in single point diamond turning of carbon steel was approximately 10 nm Ra and 6 nm Ra for raster milling processes.