This study is focused on analysing residual stresses (RSs) after turning high-tempered bearing steel through the use of the X-ray diffraction (XRD) technique. Phase transformations expressed in terms of the near-surface white layer (WL) and the corresponding microhardness profiles are correlated with the RSs as well as the depth of the RS profiles. Normal and shear components of RS and FWHM (full width at half maximum) of the diffraction peaks are analysed as a function of cutting insert flank wear as well as the cutting speed. It was found that the influence of tool wear prevails over cutting speed, RSs tend to shift into the compressive region with increasing tool flank wear, and the valuable shear components of RSs can be found in the near-surface region when the cutting inserts of lower flank wear are employed. The increasing flank wear also increases the depth in which the compressive RSs can be found. Furthermore, surface RSs are affected by the phase transformation process (formation of re-hardened WL) as well as the superimposing mechanical and thermal load.