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In the paper chatter vibrations in cylindrical plunge grinding process are investigated. An improved model of grinding process was developed which is able to simulate the self-excited vibrations due to the regenerative effect on the workpiece and grinding wheel surface. The model includes a finite-element model of the workpiece, two degree of freedom model of grinding wheel headstock and a model of wheel-workpiece geometrical interferences. The model allows to study the influence of different factors, i.e. workpiece and machine parameters as well as grinding conditions on the stability limit and chatter vibration growth rate. Additionally, a problem of chatter identification based on the force and vibration signal measurements is studied using different time-frequency signal processing techniques. At the end the model is experimentally verified with real grinding conditions.