Chatter, a violent relative vibration between a workpiece and a cutting tool, is a frequent problem in a machining operation. Among the many factors which contribute to the problem, regenerative chatter is found to be the most detrimental. Optimal control is designed for suppressing regenerative chatter with the critical regenerative effect taken into account. Furthermore, a novel hybrid time and frequency domain approach is developed for generating the stability lobe diagram for the dynamic system after control, since the conventional frequency domain approach is no longer feasible. Numerical results are obtained in both time and frequency domain for verifying the effectiveness of the controller as well as the hybrid approach for generating the stability lobe diagram.