PURPOSE: To obtain the subject oil, containing a fatty acid separated from soap separated in a step for purifying a fatty oil with an alkali and excellent in cutting, grinding, low foaming, rust preventive, antiseptic properties and cost.

CONSTITUTION: A water-soluble cutting and grinding oil obtained by separating soap in purifying a fatty oil using preferably linseed oil as a raw material with an alkali as a by-product, neutralizing the resultant soap with an acid, separating a fatty acid and blending the prepared fatty acid with an emulsion type, soluble type or chemical solution type water-soluble cutting and grinding oil based on constituent components at blending ratios according to the respective types thereof.