The generation procedure of saw tooth chip when PCBN tools orthogonal cutting hard steel GCr15 is emulated by FEM software ABAQUS in this study. The model effectively overcomes serious element distortions and cell singularity in high strain domain caused by large material deformation. The effects of cutting edge preparation on cutting force, cutting temperature and residual stress are analyzed. Results of FEM show that cutting edge preparation has a great impact on cutting procedure. Under the same cutting condition, cutting force, temperature and residual stress of sharp edge, honed edge and chamfered edge increases in turn, and three kinds of cutting edge have the same change rule in residual stress. Chamfered edge has a good temperature distributing, and it is the best edge preparation in hard cutting.