The importance of the laboratories for the study of engineering problems is manifold. At the undergraduate level it provides an opportunity for the students to get an impression of the basic principles of engineering. At the postgraduate level it becomes an instrument for advanced level study and for the solutions to real-life engineering problems. Level of emphasis by an individual engineering institution on basic engineering, interdisciplinary aspects of engineering and relevance to international, national and local industrial trends effects the policy to establish the engineering laboratories. However, a core facility, for the teaching of the most basic principals of relevant field of engineering should be a common feature of all the laboratories associated with individual subject area. In this research paper an approach for establishing engineering laboratories is presented. It discusses the relation between the syllabus of appropriate level of study and the equipment required in the laboratory, physical planning for the laboratory, sequential and parallel approaches for establishing the laboratories, the functional capacity of laboratories, the organizational flexibility of the laboratories, the cost factor and the recurring expenditure. It suggests ways of utilizing the laboratory for effective teaching and research through optimal use of the above factors.