A cutting tool having replaceable indexable cutting insert retained in insert pockets. Each insert pocket has a base wall and first and second rear sidewall sections. A generally circular recess having a peripheral wall extends downwardly from the base wall. The cutting insert comprises an upper surface, a side surface and a lower surface from which a cylindrical protrusion extends downwardly. A first abutment surface located on the first rear sidewall section abuts a first support surface located on the side surface of the cutting insert, a second abutment surface located on the second rear sidewall section abuts a second support surface located on the side surface of the cutting insert, and a third abutment surface located on the peripheral wall of the recess abuts a third support surface located on the cylindrical protrusion of the cutting insert.