In this paper, Al2O3/TiB2 ceramic cutting tools with different TiB2 content were produced by hot pressing. The fundamental properties of these ceramic cutting tools were examined. Dry high-speed machining tests were carried out on hardened steel. The tool wear, the cutting temperature, the cutting forces, and the friction coefficient between the tool and the chip were measured. It was shown that both the wear rates and the friction coefficient at the tool-chip interface of Al2O3/TiB2 ceramic cutting tools in dry high-speed machining of hardened steel were reduced compared with that of in low-speed machining. The mechanisms responsible were determined to be the formation of a self-lubricating oxide film on the tool-chip interface owing to the tribological-chemical reaction by the elevated cutting temperature. The composition of the self-lubricating film was found to be the oxidation product of TiB2 grains, which serves as lubricating additive on the wear track of the tool rake face. The appearance of this self-lubricating oxide film contributed to the improvement in wear resistance and the decrease of the friction coefficient. This action was even more effective with higher TiB2 content. Cutting speed was found to have a profound effect on the self-lubricating behavior. In dry low-speed machining of hardened steel, the Al2O3/TiB2 tools showed mainly adhesive and abrasive wear. While in dry high-speed machining, oxidation wear of the ceramic tools was the dominant mechanism due to the very high cutting temperature. No oxide film was formed on the tool–chip interface while machining in nitrogen atmosphere, and the tool wear resistance was correspondingly decreased.