Thermally induced errors can contribute as much as 70% of the final error of the part dimensions produced on machine tools [1-5]. Thermal errors of machine tools can be treated as the superposition of a series of the errors coming from different heat source. 4 key temperature points of a turning lathe were obtained based on the temperature field analysis. A novel thermal error model on the basis of grey system theory was proposed. The basic principle and method of grey system model and its application in thermal error modeling on machine tools had been presented briefly.