Residual Stress Analysis in Orthogonal Cutting Process gives the 3D simulation which include all parameter of real time orthogonal cutting like rake angle, depth of cut and cutting velocity. Integrating Taguchi method can be very effective in process parameter optimization. It not only optimizes the parameter but also indicate the values of response through which optimum process parameter selection can be justified. The results are based on preselected range of values of input parameters. Residual Stresses induced after machining are significantly influenced by rake angle and depth of cut. As rake angle and depth of cut increases, residual stresses also increases. Means residual stresses induced are directly proportional to increase in rake angle and depth of cut. Our study utilizes finite element software to simulate the residual stress analysis of medium carbon steel AISI1020 during the orthogonal cutting process on shaper machine.