This work presents a comprehensive approach to the control of tool's position, in the presence of machine tool structure vibration, nonlinear cutting force, and random tool vibration due to random distribution of microhardness of workpiece material. The controller is combination of Proportional and linear quadratic gaussian- (P-LQG-) type constructed from an augmented model of both tool-actuator dynamics and a nonlinear dynamic model relating tool displacement to cutting forces. The latter model is obtained using black-box system identification of experimental orthogonal cutting data in which tool displacement is the input and cutting force is the output. The controller is evaluated and its performance is demonstrated.