In order to invesigate the grooving performance of ceramic insert tools, cutting test was conducted on low and medium carbon steel under various conditions. Wear patterns, wear rates and chip shapes were observed precisely about tools of several chip breakers. Main results obtained were as follows; 1) The failure of ceramic tools in grooving operation largely depends on the generation and disposal of the chip, and segregation of tool rake face near the cutting edge easily occurs on brittle tools. In grooving low carbon steel, side flank face tends to break because of the adhesion of work material. 2) It is possible to use TiC added ceramic tools for grooving medium carbon steel. Also slanted rake face tools show good results for practical deep grooving. In these cases, emulsion type cutting fluid works effectively to dispose of chips and improve the surface roughness, but tends to increase the rake face chipping of the tool.