In order to improve multi-axis machine accuracy, error compensation techniques have been widely applied. However, the lack of reliable methods for direct, global and comprehensive estimation implies that all compensation techniques are based on off-line sequential error components measurement. These measurements provide static results, and cannot reflect the actual machine conditions. Thus, these results are not representative of the real working conditions because of disturbances from thermal distortions and dynamic perturbations. This paper presents an on-line error identification and compensation approach for CNC multi-axis machine tools. Based on the simultaneous measurement of error components, the proposed identification scheme is built to ensure volumetric error prediction for an adaptive error compensation system. Implemented on a moving bridge type CMM, the approach led to a significant improvement of the three-dimensional measurement accuracy.Compared to the conventional off-line error compensation techniques, the proposed identification and compensation approach can further improve the compensation adaptability and efficiency.