A thermo-elastic-viscoplastic explicit FEM model was developed to predict residual stress distribution in sequential cuts. The simulation shows that residual stress distribution may be controlled by planning the sequential cuts. Residual stress formation mechanisms were investigated by tracing the stress-strain history in unloading of cutting forces, temperature and clamping forces. Cutting forces and temperature have large effect on residual stresses and strains, while the clamping force has slight effect. These results offer an explanation for our early work showing the very significant effect of cutting conditions on residual stresses and subsequently on surface performance.