In the machining process of NC lathe, the equipment needs to be maintained in good condition to prevent accuracy degradation and abrupt down-time in production. Bearing in the spindle system is one of the most critical components that are responsible for this occurrence, since the fault progression of the bearing usually leads to the increased vibration and defective products in the manufacturing process. This paper addresses the design of a testbed for spindle of NC lathe that explores the correlation of bearing vibration and dimensional accuracy by using accelerometer and gap sensor during the turning operation. Once the relation is established, the remaining usefule life is predicted for the bearing to reach the threshold, which is of great importance in view of condition based maintenance.