The manual procedure of drafting engineering design is fast becoming obsolete. One of the important areas in CAPP is to automate tolerance assignment which is encountered in mechanical part design. This paper presents an approach for automating tolerance assignment using CAD database and tolerancing database in CAD drawing. The system is consisted of four major functions feasture extraction, feaure inferencing, rule-based tolerance allocation, and automatic upating. Auto CAD R.II is employed as CAD system and a computer progran is developed by using Auto LISP on PC-386.