A free-machining, precipitation-hardenable, martensitic stainless steel is described that provides a unique combination of machinability, processability, and toughness. The broad compositional range of the steel alloy of the invention is as follows, in weight percent: C 0.030 max. Mn 0.75 max. Si 0.75 max.. P 0.040 max. S 0.15-0.35 Cr 14.0-15.5 Ni  5.0-6.0 Mo 0.50-1.2 Cu  3.0-4.0 Nb 0.10-0.30 B 0.010 max. N 0.030 max. The balance of the alloy is iron and the usual impurities found in commercial grades of martensitic precipitation-hardening stainless steels intended for similar use or service.