A method and apparatus for machining an internal surface of a differential case. A lathe having a turret and a pair of spindles are in electrical communication with a programmable computer. Integrally connected to the turret is a cutter gripper assembly that is selectively grippingly engageable with a cutter. A differential case is mounted horizontally within a mount assembly on a tabletop of the lathe. Once the cutter gripping assembly engages the cutter, the turret moves toward the differential case until the cutter is in a start position within the hollow portion of the case aligned with openings in a first and second tubular portion of the case and the pair of spindles. The pair of spindles then drivingly engage the cutter and the cutter machines a first and second internal machining surface as the cutter moves from a first cutting position to a second cutting position.