This paper introduces a novel approach to in-process monitoring of the cutting temperature at the tool-chip interface (TCI). Currently, there are no tools available in the commercial market for measuring and monitoring cutting processes at the TCI region. Therefore, most of the studies about evaluating cutting temperature rely on simulation results without knowing the true temperature at the actual TCI region. In addition, recent cutting temperature measurement techniques have measurement errors occurring resulting from difficulty in estimations at the TCI region. However, the proposed method enables the measuring of cutting temperature by directly probing the localized TCI using a cutting tool coated with dielectric material. The study was conducted by utilizing the impedance characteristics of the dielectric outer layer of the cutting tool. A chemical vapor deposition (CVD) diamond coated insert that is commercially available was considered for the study to avoid wear effect. Impedance response of the dielectric layer under varying temperature conditions is assessed by Nyquist diagram using an impedance analyzer. The result of the Nyquist diagram showed temperature-dependent impedance characteristics that showed good agreement with the results from the thermal experiment which was a comparison between impedance response and elevated temperature. The impedance at the TCI for monitoring cutting temperature is measured under a turning process on a lathe using a constant current source. The impedance responses showed a significant decrease in impedance under various machining conditions which indicates a rise in cutting temperature. Moreover, different machining conditions showed different temperature profiles. The impedance responses were further characterized for depth of contact, which found that a drop in impedance corresponded to an increase in depth of contact. Therefore, the study showed that in-process monitoring of the cutting temperature is possible using an impedance model of the dielectric coating layer at the local TCI. Furthermore, with its versatility, this method is expected to measure the vibration, chatters, cutting force, and so on, as the results showed that impedance is not only sensitive to temperature but also to contact area. The application and expectation of this study is to provide real-time machining data to help end users in manufacturing industry to improve product quality, productivity, and prolonged lifespan of cutting tools.