The critical characteristics of adiabatic shear fracture (ASF) that induce the formation of isolated segment chip in high-speed machining was further investigated. Based on the saturation limit theory, combining with the stress and deformation conditions and the modified Johnson-Cook constitutive relation, the theoretical prediction model of ASF was established. The predicted critical cutting speeds of ASF in high-speed machining of a hardened carbon steel and a stainless steel were verified through the chip morphology observations at various negative rake angles and feeds. The influences of the cutting parameters and thermal–mechanical variables on the occurrence of ASF were discussed. It was concluded that the critical cutting speed of ASF in the hardened carbon steel was higher than that in the stainless steel under a larger feed and a lower negative rake angle. The proposed prediction model of ASF could predict reasonable results in a wide cutting speed range, facilitating the engineering applications in high-speed cutting operations.