The tool edge radius effect in micromachining of ferrous materials was investigated extensively using advanced numerical and experimental approaches. The results revealed that the best surface finishing could be obtained at a critical combination of undeformed chip thickness and tool edge radius where material is removed through severe plastic deformation associated with an effective negative rake angle. The chip formation exhibits an extrusion-like behaviour as driven by intense deviatoric and hydrostatic stresses that are highly localised around the deformation zone. The changes in the chip formation behaviour over the range of a/r = 0.05-2.0 are indicated by four stages of machining force distributions. It is worth noting that the tool edge radius effect has a great influence on material deformations and contact interaction in tool-based micromachining. Thus, an analytical contact length model for tool-based micromachining is proposed.