In an attempt to develop a free machining steel without lead, a quite new free machining steel which has superior machineability was developed. This new free machining steel is characterized by characteristic inclusions as calcium sulphides surrounding calcium aluminates controlled by special calcium treatment. This steel not only has a good machinability same as of 0.05% lead steel in drilling operation with high speed steel tool, but also has that more than conventional calcium bearing free machining steel in turning operation. The mechanical properties of this free machining steel is also attractive, in addition to machineability. The degradation of strength and enlargement of anisotropy in the mechanical properties with increase of sulphur contents is small due to the characteristic morphology of inclusions in this steel. The performance of this steel has made it possible to apply the free machining steel to the structural steel such as even high-strength steel for gear.