AbstractThermal errors account for a significant part of the dimensional errors of components produced by precision machine tools. These errors are commonly compensated using predictions from temperature-based empirical models. The accuracy and robustness of these predictions are affected by the locations of temperature sensors used to obtain the model’s input data. Methods for sensor selection found in literature are often difficult to replicate and automate because they require tuning of several hyperparameters. This work presents a sensor and model selection approach that uses proper orthogonal decomposition (POD) and QR pivoting to select a subset of sensors that have been preinstalled in the machine tool as possible model inputs. These sensors are then sorted according to their correlation with the thermal error being modelled. The final set of inputs and thermal error model structure is chosen using Bayesian Information Criterion (BIC) to limit model overfitting. The approach was tested by modelling the Y-axis thermal error measured from air-cutting experiments performed under different spindle speeds and feed rates. This enabled determination of the structure and the choice inputs for Adaptive Neuro Fuzzy Inference System (ANFIS) and Artificial Neural Network (ANN) thermal error models. The accuracy of these models was compared to that of models trained using inputs selected by conventional approaches: the least absolute shrinkage and selection operator (LASSO), fuzzy c-means clustering (FCM), and principal component regression (PCR). The presented approach had better or comparable results to the conventional approaches while using fewer inputs. The presented approach is also well suited for automation compared to conventional approaches that require expert input.