The overall goals of this project are to create a novel and transformative dimensional sensing principle for curved surface metrology based on diffraction theory, test the hypothesis that this methodology can be comprehensively modeled for precision spindle metrology, and provide the measurement science and infrastructure needed by industry to adopt new dimensional measurement technology for precision manufacturing process health monitoring. Spindle accuracy greatly affects the shape, precision, and surface roughness of a workpiece. Therefore, spindle error measurement technology, i.e., utilizing a cylindrical or spherical target artifact with non-contact sensors to measure a machine tool spindle’s “axis of rotation” errors, plays an important role in precision metrology, and the measurement and evaluation of precision machinery are hot topics in the related research area. Currently, a few approaches in measuring and evaluating precision spindle systems by using capacitive sensors (CS) exist. However, CS is typically designed for flat target surface measurement because the different behavior of the electric field between two surfaces causes error when measuring a curved target surface. Although these sensors can conveniently provide a quantitative measure of the spindle motion, they cannot be properly used for spindle metrology if the spindle shaft size gets down to the millimeter scale because the CS effective sensing area is larger than the measuring target area. To fill this technology gap, a novel methodology for micro spindle metrology is proposed that utilizes curved edge diffraction (CED) at the spindle surface. Assuming that an electromagnetic (EM) wave incidents on a smooth curved, perfectly conducting surface surrounded by an isotropic homogeneous medium, such fields produced by the EM wave incident on the spindle surface may be excited at shadow boundaries of the curved surface. In this research, a CED-based sensing method will be investigated by establishing the relationship between spindle motion and the total field produced by interference of multiple waves due to CED at the spindle surface and will be applied for the in-situ micro spindle health monitoring and diagnosis in the precision manufacturing process.