Reliability design is important to product's quality, reliability allocation is the main assignment of reliability design, and reliability index allocation is constrained by the cost. CNC grinder is the last machinery tool in precise manufacturing, whose reliability level will influence greatly to the manufacturing quality and production efficiency. The reliability optimal allocation method was proposed for the lowest cost in order to maintain a certain reliability level of the system of CNC grinder. The reliability optimization allocation model was created, the reliability index was allocated for each subsystem of the CNC grinder by using the genetic algorithm, and the costs were compared for that of the allocated and the present CNC grinder. The results show that the overall cost can be dropped 37%, and the optimization effect is obvious. The method can be used in reliability design of CNC grinder, also provides reference for reliability design to other mechanical and electrical products alike.