The avalanche of environmental challenges and health hazards associated with the use of mineral-oil based metalworking fluids is a global concern. This paper investigates the feasibility of developing a viable and eco-friendly metalworking fluid from varied blends of cashew nut shell liquid (CNSL) with palm kernel oil (PKO). The methodology involved extraction of CNSL using roasting and Soxhlet methods. The CNSL extract was blended with PKO at varied proportions and characterized for phytochemical substances using gas chromatography-mass spectrometer (GC-MS), functional phase identification by XRD, and physicochemical compositions. Results show that the Soxhlet extraction route gave a better yield of 35.8% against 20.4% from the roasting process. Both CNSL and PKO exhibit the presence of bio-active compounds including flavonoids, alkaloids, tannins, phenol, terpenoids, saponins, coumarins, and steroids. These outcomes suggest that the blend developed is a viable metalworking fluid representing a huge value-addition to cashew nut waste and a boost to a cleaner environment.