In this research, the machinability of iron-recycled grey cast iron powder metallurgy parts is investigated. For this purpose, grey cast iron swarfs were transformed to powders by target jet milling method and were then used to prepare powder metallurgy parts in combination with commercial iron powder. Green compacts were prepared with the variables of cast iron powder percentage and compaction pressure. Design of experiments was conducted by response surface method for sintered parts with the variables of cast iron powder percentage, compaction pressure, sintering temperature and sintering time each in five levels. Regression analysis and analysis of variance were used to investigate the effect of input parameters, develop the mathematical models and evaluate the validity of the models. In the green section, machinability was qualitatively investigated in drilling. For sintered parts, machinability was evaluated by measuring the thrust and torque forces and the obtained surface finish in drilling. The obtained results certificated the accuracy of the extracted regression equations for predicting the machining properties of the parts. Also, the results demonstrated that the addition of jet milled grey cast iron improves the machinability of iron-based powder metallurgy parts.