Liquid nitrogen (LN2) machining is considered as a safe, clean, and environmentally friendly machining process. This paper aims to investigate the vibration, tool wear and surface roughness mechanism of the ceramic insert during turning of Inconel 718 alloy under dry machining and LN2 machining. The experiments were performed at three cutting speeds (100, 150, 200 m/min), feed rates (0.04, 0.08, 0.12 mm/rev) and depths of cut (0.2, 0.4, 0.6 mm). The experiment results show better machinability and longer tool life in LN2 machining. The vibration acceleration is reduced by 14–32%. A 17–34% reduction of workpiece surface roughness is observed. Flank wear and notch are the predominant wear forms both in LN2 machining and dry machining, and 16–34% reduction of flank wear is noted in LN2 machining.