A stochastic design procedure of optimum mechanism considering tolerances on the link lengths and clearances in the joints is presented. The mechanical error is newly analyzed for the three-sigma band of confidence level through new stochastic model of 4-bar linkage. A multiobjective optimization problem with two objective functions, mechanical error and manufacturing cost, is formulated. Tolerance width on the link length and clearance size are taken as design variables. The conflict between the two objectives is represented in the form of trade-off curve. A new concept of loop closure error is also introduced and applied to the optimum design of mechanism with or without the tolerances and the clearances. Numerical results are given with two examples of a 4-bar function generating mechanism and a 4-bar path generating mechanism.