Many rapid prototyping systems which produce prototypes by layer-by-layer material deposition are now commercially available. The layer-by-layer deposition process leads to a stepped surface known as staircase. Staircase formation is a geometric constraint of the layered manufacturing, which can not be eliminated. The presence of staircase on the surface of a prototype detracts from the surface finish and hence restricts functionality of prototypes. It is realized that there is a need to make modifications in RP (rapid prototyping) systems so that prototypes with better surface finish can be produced without incurring high production costs. A virtual hybrid fused deposition modelling system (hybrid-FDM) is proposed in the present work that uses both layer-by-layer deposition and machining. In this system, CAD model is sliced adaptively using limited centre line average (Ra) value as a criterion (Pandey et al. 2003a). Hot cutter machining/ploughing (HCM) (Pandey et al. 2003b) is recommended to machine the build edges (staircase) of ABS material. Numerically controlled x-y traversing mechanism is proposed as an attachment to move hot cutters along the periphery of slices to machine build edges. In this paper, geometrical designs of cutters are proposed. A process planning system to decide the number of layers to be deposited and then machined in order to access intricate features of a part is implemented. The developed system simulates surface roughness, before and after hot cutter machining. An experimental study is carried out by machining the build edges of an axisymmetric FDM part on lathe machine to form a basis for a hybrid-FDM system. © 2006 Taylor & Francis.