The realization of the handwheel function is a key problem for development of numerical control system of micro milling machine. This paper introduced the interface specifications and hardware connecting methods of handwheel NK100AB2, developed control program based on PMAC (Programmable Multi-Axis Controller) and industrial personal computer, finally achieved the function of axes selecting and the feed rate selecting. Based on the traditional edge detector tool setting method, an improved tool setting method is proposed. The inverted micro milling cutter hilt is used to replace the traditional edge detector, which avoids the opposite reamer error caused by the irregular cutter blade shape, finally, tool setting function is achieved through the collecting of electrical signal. The research will provide a useful reference for the realization of handwheel and tool setting of micro milling machine based on PMAC.