Current methods for assuring assembly accuracy are mainly based on process capabilities and specification limits of each mating part without considering the interrelationship between the distribution of fit size and those of mating sizes (typically, hole and shaft). If a high assembly accuracy is required, the control of machining processes of mating parts will be very strict and the manufacturing cost will be greatly increased. Aiming at assuring precision assembly accuracy with an acceptable manufacturing cost, a new approach based on fit capability indices for process parameter design and quality improvement is described in this paper. Referring to process capability indices Cp and Cpk, fit capability indices FCp and FCpk are proposed to provide a new measure for estimating the fit property and assembly quality. Typical applications are introduced with detailed case studies.