Oxide inclusions formed during steelmaking processes influence the machinability of steel products. At moderate and high cutting speeds, the tool life is dominated by chemical wear. However this wear can be suppressed by engineering exogenous and indigenous glassy oxide inclusions in steel. The present work demonstrates a method to engineer glassy oxide inclusions in a low carbon free cutting steel applying a new thermodynamic model for deoxidation control of steel based on slag‐melt as well as melt‐oxide inclusion equilibration. The model is used online in an industrial production line for the controlled production of glassy inclusions. These inclusions are shown to improve machinability by lubricating the tool‐chip interface during machining of the steel at high cutting speeds. Using an inclusion engineered work piece, the crater wear of an uncoated P10 tool is significantly improved and the tool life is tripled at cutting speeds in the range between 200 and 400 m/min. The industrial results show that thermodynamic modelling is a powerful tool to produce free cutting steels with consistently good machinability behaviour.