The aim of present study is to experimentally investigate and compare the effect of grinding parameters, i.e. downfeed, work velocity and lubricating environments, on the surface integrity of hardened AISI D2 tool steel. The surface integrity of ground surface was evaluated in terms of surface roughness, surface topography, microstructure and microhardness variation. Grinding performance was investigated concerning grinding force, specific grinding energy and grinding temperature. Quasi-steady-state moving heat source model was used to estimate grinding temperature under different environments, viz. dry and flood. The second objective of the present work is the non-destructive evaluation of thermally damaged ground surface by the novel Barkhausen noise technique. The results showed that flood environment reduces grinding force, specific grinding energy and grinding temperature owing to effective cooling and lubrication medium. A thick redeposition layer over ground surface along with minimum surface roughness was observed under dry grinding. Further, drastic change in microstructure and microhardness was observed under dry environment due to a number of passes of grinding wheel over ground surface without coolant, which induced excess heat and developed martensite layer near the nascent surface. Finally, poor BN response such as lower root mean square (rms) and peak value was found in thermally damaged sample owing to large obstacles for magnetic domain wall displacement. © 2021, The Institution of Engineers (India).