This experimental study investigated the effects of a conventional cutting fluid during drilling cylindrical holes on workpiece materials made of the AISI 1040 steel. Drilling responses were compared between dry and wet (in presence of the cutting fluid) cutting conditions with respect to drilling force, roundness deviation and taper of the hole, and chip morphology. High production machining and drilling with high cutting speed, feed, and depth of cut were found to be inherently associated with the generation of a large amount of heat and high cutting temperature. In a dry condition such high cutting temperature not only reduces dimensional accuracy and tool life but also impairs the roundness deviation and taper of the hole. The use of a conventional cutting fluid, in such a situation, was very effective to reduce the cutting temperature. In a dry cutting condition, numerous tool-wears were found on the drill bits. Drilling in such a dry condition seriously affects roundness of the hole, and chip shape and color. Contrastingly, use of a traditional cutting fluid reduced temperature as well as improved roundness and taper of the hole. It also acted as a lubricate at the tool tip–work surface interface. Overall, the conventional cutting fluid enhanced the quality of the machine work and potentially can increase machine life of drill bits.