Machining of advanced materials, such as composite, encounters high cutting temperatures and rapid tool wear because of the abrasive nature of the reinforcement phases in the workpiece materials. Ultrahard coatings, such as chemical vapor deposition diamond, have been used for machining such advanced materials. Wear of diamond-coated tools is characterized by catastrophic coating failure, plausibly due to the high stress developed at the coating-substrate interface at high temperatures because of very different elastic moduli and thermal expansion coefficients. Temperature reductions, therefore, may delay the onset of the coating failure and offer tool life extension. In this study, a passive heat-dissipation device, the heat pipe, has been incorporated in composite machining. Though it is intuitive that heat transfer enhanced by the heat pipe may reduce tool temperatures, the heat pipe will likely increase heat partitioning into the tool at the rake face, and complicate the temperature reduction effectiveness. A combined experimental, analytical, and numerical approach was used to investigate the heat-pipe effects on cutting tool temperatures. A machining experiment was conducted and the heat-source characteristics were analyzed using cutting mechanics. With the heat sources as input, cutting tool temperatures in machining, without or with a heat pipe, were analyzed using finite element simulations. The simulations encompass a 3-D model of a cutting tool system and a 2-D chip model. The heat flux over the rake-face contact area was used in both models with an unknown heat partition coefficient, determined by matching the average temperature at the tool-chip contact from the two models. Cutting tool temperatures were also measured in machining using thermocouples. The simulation results agree reasonably with the experiment. The model was used to evaluate how the heat pipe modifies the heat transport in a cutting tool system. Applying heat-pipe cooling inevitably increases the heat flux into the tool because of the enhanced heat dissipation. However, the heat pipe is still able to reduce the tool-chip contact temperatures, though not dramatically at current settings. The parametric study using the finite element analysis (FEA) models shows that the cooling efficiency decreases as the cutting speed and feed increase, because of the increased heat flux and heat-source area. In addition, increasing the heat-pipe volume and decreasing the heat-pipe distance to the heat source enhances the heat-pipe cooling effectiveness.