Efficient and accurate measurement and identification of geometric errors are crucial for improving the precision of CNC machine tools. The X-AX Laserbar, as a novel tool for indirect measurement, has not been extensively studied for the identification of geometric errors in machine tools. In this paper, the geometric error model for a three-axis machine tool is established to illustrate the multilateration measurement principle of the laserbar, and a non-redundant and unconstrained identification method is proposed to identify these geometric errors. This method avoids the use of redundant parameters and additional constraints by employing pose error twists to describe the geometric errors. These pose error twists are identified in a transitional coordinate system, and then the geometric errors will be identified in the machine coordinate system by deriving the relationship between the pose errors and geometric errors. The proposed method is validated with the VMC-850E three-axis machine tool. The geometric error measurement using a laserbar is completed in about 40 min, showing great efficiency. The experimental results indicate that the proposed method is capable of accurately identifying the 17 geometric errors required for error compensation. The identified geometric errors are then applied to the machine tool’s accuracy improvement through error compensation. The results show that the actual geometric errors are controlled to a low level. The proposed method can efficiently measure the geometric errors of three-axis machine tools and contribute significantly to improving their geometric accuracy.