The combination of a hard subsurface layer and a ductile component core is advantageous for many applications. Steels are often heat treated to create such a hardened subsurface, which is both time- and energy-consuming. It is of great advantage to create a hardened subsurface directly within the machining process, as the production line of most components includes such a process to produce the desired geometric dimensions and surface quality. To achieve a martensitic subsurface layer within the machining process, cryogenic, external turning using a metastable AISI304 austenitic steel is used herein. Herein eddy current testing and the analysis of higher harmonics are used for the detection of the ferromagnetic, martensitic phase in the parent austenite. A good correlation is found between the martensite content and the amplitude of the signals measured. Therefore, eddy current testing is considered as a suitable real-time, nondestructive testing method, which forms the basis for the generation of a tailored, deformation-induced martensitic subsurface layer during external turning.