In order to understand the cutting effect of a new water soluble synthetic ester extreme pressure additive KLG3, the AISI 304 stainless steel was turned under microemulsion(10% KLG3), other lubricating fluid conditions and dry cutting. Then the cutting effects were compared in aspects including roughness, tool life, tool wear, cutting and cutting force. The results show that microemulsion has good effect on reducing tool wear and improving machined surface roughness which is very suitable for stainless steel cutting；and this microemulsion has good comprehensive cutting effect compared with traditional cutting fluid, and even can replace traditional cutting fluid.