Nowadays, Small and medium-sized Manufacturing Enterprises (SMEs) are facing intensive competition from the global market. For these SMEs, how to better manage and record the previous Product Development (PD) knowledge has become a core issue for them to improve PD process, cut down development cost and reduce lead time. In this paper, we present our work in developing a STEP (Standard for the Exchange Product Model Data)-compliant knowledgebase for the development of customized products. The paper focuses on how to develop a STEP-compliant knowledgebase that is applicable to different types of customized products. This knowledgebase uses the STEP as a foundation. Tools are developed to model, record and search information such as customer requirements and expectations, engineering responses, product design, decision making and product machining processes, etc. The recorded product information and knowledge in the knowledgebase will then be reused for the development of customized products of similar types.