Steel for machine structure use excellent in tool lifetime in a broad range of cutting speeds regardless of continuous machining, intermittent machining, or other systems and further in various machining environments such as use of a cutting fluid or a dry, semidry, and oxygen enriched environment, having a chemical composition containing, by mass %, C: 0.01 to 1.2%, Si: 0.005 to 3.0%, Mn: 0.05 to 3.0%, P: 0.0001 to 0.2%, S: 0.0001 to 0.35%, N: 0.0005 to 0.035%, and Al: 0.05 to 1.0%, satisfying [Al %]−(27/14)×[N %]≧0.05%, and having a balance of Fe and unavoidable impurities and forming an Al2O3 coating on the surface of a cutting tool by machining using a cutting tool coated on the surface contacting the machined material by metal oxides with a value of a standard free energy of formation at 1300° C. of that value of Al2O3 or more, and a machining method of the same.