A novel fluid transmission mechanism integrated CNC tool setting device was developed by analyzing the existing CNC tool setting device. As a standard tool, through one clamping, the coordinate system for workpiece could be established on CNC boring and milling machine, and the service life of the device was improved by resilient contact between the axes and the cutter. It was also very convenient to acquire the length compensation amount of other tools. Besides, the contour of the workpiece and the depth of the workpiece could be measured by the cooperation of the CNC coordinate position. The device was not restricted by the Z position area of the tool. It is easy to use and can be applied to adjusting tools on CNC lathe.