ABSTRACT In concurrent engineering era, the collaboration between engineering and manufacturing is a vital condition for remaining competitive. For that, an interactive computer-aided design method is required for optimal tolerance allocation. In this regard, dimension transfer and tolerance allocation approaches serve as crucial tools for design engineers to reduce the total manufacturing cost of mechanical assembly as well as to ameliorate the product quality. This paper proposes an efficient collaborative hybrid tool for computer-aided integration to an optimal tolerance allocation based on a combination of unique transfer and difficulty coefficient evaluation. The tolerance allocation approach is based on manufacturing difficulty quantification using tools for the study and analysis of reliability of the design or the process, as the Failure Mode, Effects and Criticality Analysis and Ishikawa diagram. The proposed method is performed to produce allocated tolerances according to difficulty requirements to reach a mechanical assembly with high quality and low cost. To validate the proposed concepts and methods, an integrated tool is implemented using graphical user interface in MATLAB. Hence, an Integrated CAT tool for Dimension Transfer and Tolerance Allocation, named CAD_DT&TA, is proposed to expose various tolerance allocation approaches respecting functional and manufacturing requirements. Several examples can be executed using the proposed interface to highlight the benefits of the accomplished integrated tool. The results identify the real benefits of the innovative dimension transfer and tolerance allocation approach as reducing total cost and improving the quality of assembly product.