By combining modular design with top-down design, a composite design method is proposed in this paper, namely top-down modularization. This design synthesis is achieved based on extensible skeleton model (XSM). XSM is developed oriented to design reuse by integrating traditional skeleton model with useful knowledge, resources, processes, et al. According to the characteristic of multilevel structure of products, a hierarchy framework of XSM is built. In addition, the top-down modular design process based on XSM is established. A design case of a typical two-axis servo mechanism is studied to illustrate as well as to demonstrate the validity of the method.