This thesis illustrates the ability of using tachometer for measuring the position and velocity of movable axes in CNC machines. An A/D converter module was designed and implemented using the ISA expansion slot of a PC to enable tacho signal conversion and data acquisition. A proper CNC milling machine type MAH02000 that uses DC tachometer within the servo drive to generate the tacho signal, whereas the CNC capability of velocity control and position measurements were used to compare results acquired from this research. Data acquisition and processing programs were developed and used in a number of real tests using the MAHO2000, and the developed A/D converter module and a PC. Results of velocity and position showed adequate accuracy for a number of CNC applications where max error of not more than 1.2 mm was achieved, Furiher processing and evaluations on acquired tacho data was conducted to evaluate the possibility of enhancing the achieved accuracy and identifying noise effected within the acquired tacho data. The technique of FFT and IF FT was applied and showed marginally better results by reducing the identified noise however; drawbacks of such application were pointed out. Application of a selected digital filter is conducted and showed advantageous results compared with the technique of FFT, through, careful attention is highly required to select and set the filter parameters. Position accuracy of 0.8 mm was achieved using such technique. This may open the way for further future investigation to enable automatic selection of filter parameters to realize real time and proper application of the developed technique. Analysis of noise pattern was conducted using the auto -correlation function which showed validity in defining the noise form. Noise was identified of having both periodic and random pattern, through periodic pattern is more dominant which was related to certain sources. Finally, conclusions and suggestions for possible further works were presented for completeness.