Improving machinability has consistently been an essential research topic in the machining community. However, a rapid and effective method to characterize machinability from the fundamental essence of machining is still lacking. This work proposed a new characterization methodology for assessing machinability from the principle of cutting energy consumption. An original Drop Hammer based Orthogonal Cutting (DHOC) test machine driven by gravitational potential energy was developed to conduct the machinability test. Using the Cutting Distance with Equal Energy (CDEE) method, machinability can be assessed by measuring the cutting distance without expensive measuring apparatus. Therefore, the cutting distance indicator can simplify the test procedure. Meanwhile, the CDEE method avoids the necessity for precisely calculating the consumptions of various complex cutting energies. Moreover, in-situ measurements coupled with the Digital Image Correlation (DIC) technique and Electron Back-Scattered Diffraction (EBSD) characterizations were utilized to evaluate the deformation characteristics and surface integrity during the CDEE tests. The proposed CDEE method has been validated from three aspects involving materials, cutting tools, and surface modification technology. Furthermore, a machinability optimization procedure based on the CDEE method has been proposed. The cutting distance indicator was used as an optimization objective for optimizing technology parameters to improve machinability. This CDEE method based on the DHOC test machine proved to have high application potential for the characterization and optimization of machinability.