The profile accuracy of the workpiece is mainly determined by the accuracy of abrasive wheel in the form-grinding process. Thus, the shaped wheel dressing becomes one of the key points in the form-grinding process. In order to grind the revolving curved surfaces grooves whose cross-sectional profiles are steep and smooth, a new NC dresser with three NC axes is developed by adding a swing axis on the basis of NC external cylindrical grinding machine. A wheel of any desired convex profile can be dressed when using the Diaform single-diamond dresser and the possible geometrical interference between the single-diamond dresser and wheel can be eliminated. By analyzing the influence of installation accuracy on the profile accuracy, a method of comprehensive error compensation is presented. The comprehensive errors can be diminished greatly to improve the profile accuracy by means of error compensation. It is proved in the experiments that the precision requirements of grinding the formed surfaces grooves can be met.