Bone cutting is widely used in orthopaedic, dental and neuro surgeries and is a technically demanding surgical procedure. One of the major concerns in current research is thermal damage of the bone tissue caused by high-speed power tools, which occurs when temperature rises above a certain threshold value for the tissue known as bone necrosis. Hence, optimisation of cutting parameters is necessary to avoid thermal necrosis and improve current orthopaedic surgical procedures. In this study a thermo-mechanical finite element model of bone cutting is presented that idealises cortical bone as an equivalent homogeneous isotropic material. The maximum temperature in the bone was found in the region where the thin bone layer (chip) was separated from the bone sample that was adjacent to the tool rake (i.e., front face of the tool). Temperature values were calculated with the model and compared for cutting conditions with and without a coolant (irrigation). The influence of bone's thermal properties on the depth of thermal necrosis is discussed. The simulated cutting temperatures were compared with experimental results obtained in bone drilling tests. Simulations of the cutting processes identified critical variables and cutting parameters affecting thermo-mechanics of bone cutting.