Tool based mechanical micromachining technology is gaining importance in MEMS device fabrication because of its ability to machine 3D micro features on different engineering materials. This paper presents the development of tool based mechanical micromachining center with piezoactuated workpiece feeding system. A high speed spindle is used to rotate the micromilling/drilling tool at a speed of 12,000 to 60,000 rpm. A thermoelectric based liquid cooling system is developed to control the temperature of the high speed spindle at a set value. Along with the X-Y positioning system, the workpiece is also mounted on a piezoactuator to provide Z-axis motion during machining operation. An electrical continuity based tool-workpiece contact detection system is developed to overcome premature tool failure during initial tool registration with the workpiece. Based on the developed tool-workpiece contact sensor, an in-situ measurement system is developed to measure the micromachining depth. Experiments were conducted to measure the performance of spindle cooling system and in-situ measurement system.