In order to improve the machinability but not to impair other properties of the prehardened mold steel for plastic, the composition was designed by application of Thermo-Calc software package to regulate the type of nonmetallic inclusion formed in the steel. The regulated non-metallic inclusion type was also observed by SEM and EDX. Then the maehinability assessment of the steel with designed composition under different conditions was studied by the measurement of tool wear amount and cutting force. The results show that the composition of free cutting elements adding to mold steel for plastic can be optimized to obtain proper type of non-metallic inclusion in the aid of Thermo-Calc, compared with the large volume fraction of soft inclusion which is needed for promoting ductile fracture at low cutting speeds, the proper type of inclusion at high cutting speeds is glassy oxide inclusion. All those can be obtained in the present work.