During the chip removal process, the unmonitored tool wear not only increase the number of scraped parts but also causes the untimely tool breakage and the high costly damage on the expensive CNC machine tools. For applying the correct tool offset on the cutting tool based on the wear ratios, for determining the critical tool wear rates influencing on the work piece dimensions and surface quality and for replacing a new tool with a worn one before tool breakage during the machining operations, an automation system is required for monitoring the operation accurately. For establishing the automation system for online monitoring and estimating the tool wear in this research, a fuzzy logic system is designed by using of cutting force and vibration sensors. Cutting parameters, cutting forces and vibration variables are applied as input and the wear rate as output data to the fuzzy logic for constructing the system. Taguchi method is applied to design an experimental table for carrying out the tests. The measured and estimated results confirm the reliability of the fuzzy logic method for tool wear estimation.