Tests show that if an insulated holder is used, self-induced vibration amplitude is altered (the change can be as much as 100%). A change in self-induced vibration amplitude leads to a change in tool life in accordance with the equation T equals Q//am//ena, where Q, m and n are constant parameters determined by the technological conditions. Consequently, with any type of cutting tool insulation, it is necessary first of all to consider how this insulation affects the self-induced vibration amplitude, which determines cutting tool life. Thus, using the proposed calculation procedure it is possible to calculate dynamic processes with sufficient accuracy for practical purposes.