A high-precision and low-cost micro-CMM (coordinate measuring machine) is under development. The expected measuring range is 25 × 25 × 10 mm 3 and the resolution is 1 nm. In order to enhance the structural accuracy, some new ideas are integrated into the design, such as the arch-shape bridge for better stiffness and thermal accuracy, and the co-planar stage for less Abbe error. The linear diffraction grating interferometer and subdivision technique is proposed for position sensing to nanometre resolution. The focusing probe on the laser interferometer feedback spindle is structured in the Z-axis to guarantee the nanometre stability. In this report, the detailed design principles of the developed micro-CMM are described. The performance evaluation of each module of the prototype micro-CMM is presented. The positioning resolution of each axis to 1 nm can be achieved by combining the coarse and fine motion control on a piezo-ceramic linear motor. The Z-axis measurement can be controlled to within 15 nm repeatability. Parts of the positioning repeatability of the co-planar stage have been achieved to 30 nm. Some problems due to current techniques will be addressed.