Residual stresses induced by machining operations can be critical for the performance and lifetime of the machined components. This paper investigated the influence of cutting conditions, including the use of cutting fluid, cutting speed and tool flank wear, on the residual stresses in high speed turning of Inconel 718 alloy. X-ray diffraction measurements revealed characteristic residual stress distributions with tensile stresses in a thin surface layer and compressive stresses in a much thicker subsurface layer in all investigated samples. However, the magnitude of the surface tensile stresses and subsurface compressive stresses as well as the size of the tension and compression zone depended on the cutting parameters. Surface tensile residual stresses over 1600 MPa and 1400 MPa were induced by tool flank wear and increased cutting speed, respectively, in dry turning. The effect of cutting induced local plasticity and temperature increase on the observed residual stress distributions was analyzed based on microstructural study by electron channeling contrast imaging and electron backscatter diffraction.