In the turning operation chatter or vibration is a frequent problem, which affects the result of the machining, and, in particular, the surface finish. Tool life is also influenced by vibration. Severe acoustic noise in the working environment frequently occurs as a result of dynamic motion between the cutting tool and the workpiece. These problems can be reduced by active control of machine-tool vibration. Adaptive feedback control based on the filtered-x LMS-algorithm, enables a reduction of the vibration by up to 40 dB at 1.5 kHz and by approximately 40 dB at 3 kHz. The active control performed a broadband attenuation of the sound pressure level by up to 35 dB. A significant improvement of the work-piece surface was also observed. In the active control of tool vibration a tool holder construction based on integrated high magnetostrictive actuators was used. However, both the physical features and properties of a active tool holder construction based on high magnetostrictive actuators and the fact that this type of actuators generally have a non-linear behaviour highly reduce its applicability to the general lathe and turning operation. Therefor, a new generation embedded active tool holder shanks based on piezo ceramic actuators have been developed. Based on spectrum estimates, both coherence spectrum and frequency response function estimates has been calculated for both the old tool holder construction and the new generation active tool holder shank. From the results it follows that the phase delay is smaller and the linearity of the new generation active tool holder shank are superior compared to the old technology. It is also obvious that physical features and properties of new generation embedded active tool holder shanks based on piezo ceramic actuators fits the general lathe application.