(Ti(1-x)AlxN) coated drill is a new product of Mitsubishi Co. Its superior cutting performances in strengthened wearbility, reduced cutting force, and elongated tool-life have been reported. Aimed at providing enough information for in-process measurement and control, drilling tests on steel workpiece are performed to investigate cutting behavior and chemical stability of the coating material. The experiments are as follows: measurement of cutting force and torque, hole quality, and flank and cutting edge wear under dry and wet drilling; SEM characterization of the coated surface. Experiment results reveal that the coating material exhibits solid lubricant effect to improve the tribological interaction between the drill and the workpiece and to facilitate chip evacuation. Excellent chemical stability of the coating material is demonstrated by the material’s microstructure.