3D Welding and Milling is a solid freeform fabrication process which is based on the combination of welding as additive and conventional milling as subtractive technique. This hybrid approach enables direct building of metallic parts with high accuracy and surface finish. Although it needs further improvements it shows an application potential in rapid tooling of injection mold inserts as the investigation results show. To optimize the process for higher surface quality and accuracy effectively Taguchi method is applied to the experimental investigation. in this way relationships between process parameters and final product qualities such as tensile strength and surface hardness are found with minimal efforts.