<p>The conical cutters are typically ground using the Isoform® technology, which simulates rack-and-pinion meshing. Notably, the grinding wheel profile matches the normal profile of the rack (also called the generating rack). Accordingly, existing methods have modified the rack’s geometry parameter to indirectly modulate the cutting-edge profile. However, the theoretical machining errors are incompletely eliminated. Therefore, this study introduces a novel iterative algorithm to concurrently derive the generating rack and the cutter-side flanks from a pre-determined cutting edge, where the cutting-edge profile is first positioned on the generating gear, resulting in a perfect mesh with work gear flanks. This loop is initiated by predicting the normal vectors of the cutter flanks along the cutting edge by rotating the generating gear’s normal vectors about the tangent vectors at the predicted clearance angles. The generating rack is then produced by solving the meshing condition with the cutting edge. Furthermore, the conical cutter’s side flank and actual cutting edge are solved from the enveloping condition with the generating rack. The actual clearance angles are then calculated and compared to the predicted clearance angles to evaluate the convergence condition. The numerical examples indicate that while the maximum deviation of the previous method can reach 25.37 µm, the proposed method consistently maintains the error at virtually zero, irrespective of variations in the cutter design parameters or the work gear profile.</p>