In order to distribute the geometric errors of parts economically and reasonably, a method for the analysis and design of geometric accuracy was proposed. According to the specific structure of a three-axis CNC surface grinding machine, a geometric error propagation model including 21 parameters was established on the basis of multi-body system theory and homogeneous coordinate transformation method. The model was verified and it had ideal prediction accuracy. Key geometric errors were analyzed by using orthogonal design and parameter test of DOE methods. After cost analysis and error tracing, a cost-quality model for key geometric error variables was established on the basis of robust design theory. At last, the tolerances of key geometric error variables were distributed according to this model. The results have shown that the methods mentioned above are effective in the distribution of the geometric accuracy of grinding machine.