A Toyota technician using a tire gauge to show exactly how worn a customer’s tread is.
Update: Here’s an excerpt from RepairPal’s blog about when tires should be replaced.
Typically, new tires start out with 1/3? tread depth. If it rains a lot where you live and wet roads are a concern, you should replace your tires when they reach approximately 4/32? (3mm) of remaining tread depth. If snow and ice are a factor where you live, consider replacing your tires when they reach approximately 6/32? (4.6mm) of tread depth. Just FYI—the legal minimum tread depth in most states is 2/32? (1.6mm).
Note that the gauge in the photo is showing 3/32?.