Techniques for suppression of vibration in cutting tools can save old machines and enhance design flexibility in new manufacturing systems. Structural stiffness interaction, with the use of smart materials, in an intelligent toolpost is investigated using the finite element method. The results proved the limited use of lumped modeling in driving conclusions and developing a toolpost system for dynamic response control. A transient solution is obtained for the toolpost response in which a smart material actuator is excited using pulse width modulation (PWM) for voltage generation to counteract the radial disturbing cutting force. Calculations showed that error elimination and transient response control require a minimum number of PWM cycles in each force period. Time delay between the actuation force and voltage has an adverse effect on error elimination, if it exceeds a certain limit. Increasing damping within a reasonable range might not eliminate the transient response originated by the voltage switching of the smart material actuator. The estimated static voltage in error elimination cannot necessarily be used in dynamic switching. The tool bit to actuator stiffness and tool carrier (holder) to actuator stiffness ratios are both preferred to be above ten when space and weight limitations do not exist.