The aim of this paper is to introduce a novel methodology, based on a finite element (FE) computation engine for simulation of process machine interaction occurring in machining systems. FE modelling of the milling process has the purpose of being accountable for a thorough validation of the parametric identification approach, and of providing a good physical insight into the phenomena investigated. The system considered here has a lower number of degree-of-freedoms which permits a thorough analysis. However, when taking into account the system’s nonlinear and time-varying nature, it is apparent that the results are far from being trivial. Therefore, the analysis of the milling process, taking into account nonlinearities restricting the growth of response amplitudes in the case of chatter-type instability, provides some intrinsic information of the basic features on the system that might be of both fundamental interest and practical use.