A novel fast tool servo driven by piezoelectric actuator for precision diamond turning is designed in this paper. To overcome the inherent hysteresis and drift nonlinearity effect of the piezoelectric actuator, a closed-loop control system is established using strain gauge integrated in the actuator for position feedback, which has compact structure and can avoid interference in the machining. Furthermore, a fuzzy PI control algorithm is presented. It has not only the advantages of agility and adaptability of fuzzy control, but the characteristics of high accuracy of PI arithmetic. At last, experiments are carried out and the results show that the fuzzy PI control provides significantly better tracking accuracy and robustness against hysteresis and drift effects.