The paper deals with a CNC grooving of hardened low-alloyed steel in flood and dry cutting conditions. A new generation of nanocomposite PVD coatings (Ti,Al)N and (Ti0.4,Al0.6)N deposited on WC-Co carbide when cutting at high cutting speed was characterized and compared. The statistical analysis of force time series acting during the machining, wear and tool life of the cutting tools have been assessed. Grooving with the coated tools and flood cooling showed to be successful and the quality of machined surface was high. The dry machining conditions were proven as disadvantageous and not recommended for any industrial practise, because the life time of the cutting tools was more than 85% shorter compared to the grooving with flood cooling.