Dry hard-turning is a cost-effective, efficient manufacturing method for AISI 52100 hardened bearing steel. Surface Defect Machining (SDM) is a novel approach to address surface roughness, deteriorations, residual stresses, and metallurgical changes on machined steel. SDM involves exposing workpieces to surface irregularities, reducing cutting resistance, and enhancing surface integrity and finish. In the present work, surface irregularities are formed on the surface of the workpiece in the form of indentations. Using the response surface method’s central composite design (CCD), 32 experimental runs were conducted to determine the optimal process parameters by varying the cutting and tool geometry parameters while AISI52100 steel hard turning (HT). Due to its complexity, multi-objective optimization is more challenging to study. The present work aims to evaluate the effects of input parameters on maching force, surface roughness, and workpiece surface temperature. Further, machining parameters optimization is performed employing the Grey relational analysis integrated with principal component analysis (GRA-PCA). Analysis of variance (ANOVA) was used to examine the impact of cutting and tool geometry parameters on grey relational grade (GRG). ANOVA revealed that feed has the highest influence on GRG, followed by depth of cut, nose radius, cutting speed, and negative rake angle. Cutting speed of 800 rpm, feed rate of 0.04 mm/rev, depth of cut of 0.5 mm, nose radius of 1 mm, and negative rake angle of 15° are the optimum combination of process parameters.