The microstructures, machinability and surface characteristics of Al-7Si and Al-7Si-2.5Cu cast alloys were studied after various melt treatments like grain refinement and modification. Results indicate that combined grain refined and modified Al-7Si-2.5Cu cast alloys have microstructures consisting of uniformly distributed alpha-Al grains, eutectic Al-silicon and fine CuAl2 particles in the interdendritic region. These alloys exhibited better machinability and surface characteristics in the cast condition compared with the same alloy subjected to only grain refinement or modification. Performances of the turning inserts (Un-coated, PVD and Polished CVD diamond coated) were evaluated in machining Al-7Si and Al-7Si-2.5Cu cast alloys under dry environment using a lathe. The Polished CVD diamond coated insert outperformed the Un-coated or PVD-coated cutting inserts which suffered from sizeable edge buildup leading to higher cutting force and poor surface finish. The Polished CVD diamond coated insert shows a very small steady wear without flaking of the diamond film during cutting. This paper attempts to investigate the influence of grain refinement, modification and combined action of both on the microstrutural changes in the Al-7Si and Al-7Si-2.5Cu cast alloys and their machinability and surface finish when different turning inserts used.