There are changes occuring in the field of machine tool control, i.e. hardware controllers to minicomputer systems. It originates from the fact that the latter system has more flexibility and its price has been lowered significantly. This thesis is concerned with the design and development of an on-line control system using a small digital computer and permanent magnet pulse motors to provide coordinate positioning and contouring of machine tool slides. Modification is introduced in a conventional milling machine that makes it possible to perform metal cutting operation under computer control in an open-loop system. The characteristics of pulse motors are investigated and a linear interpolation algorithm is introduced in detail. Finally the necessary software and hardware are developed.