The geometric quality of high-precision parts is highly dependent on the dynamic performance of the entire machining system, which is determined by the interrelated dynamics of machine tool mechanical structure and cutting process. This performance is of great importance in advanced, high-precision manufacturing processes, including aerospace and biomedical applications. In this paper, the dynamics of the combined spindle/cutter system, a major component of any machine tool, is identified using impact testing techniques and is successfully approximated by a second-order linear model. Results of computer simulations of machining processes that include the identified spindle/cutter dynamics show a significant influence on the quality of the final product. From this, it is concluded that, for precision workpieces, the dynamics of the spindle and cutter system will have to be taken into account in order to improve future machining controls and processes.