The machining accuracy and performance is largely influenced by the static, dynamic and thermal characteristics of spindle systems in machine tools, because the spindle system is a intermedium for cutting force from tool and machine powef from motor. Large cutting force and power are transmitted by bearing with a point or line contact. So, the spindle system is the static and dynamic weakest point in machine structure. For improvement of static stiffness of spindle system can be changed design parameters, such as diameter of spindle, stiffness of bearing and bearing span. But for dynamic stiffness, the change of the design parameters are not useful. In this paper, the combined bearing arrangement is suggested for high damping spindle system. The combined bearing arrangement is composed of tandem double back to back arrangement type ball bearins and a high damping hydrostatic bearing. The variation of static deflection and amplitude in first natural frequency is evaluated with the location of hydrostatic bearing between front and rear ball bearing. The optimized location of hydrostatic bearing for high static and dynamic stiffness is determined rapidly and exactly using the mode shape and transfer function of spindle. The calculation of damping effect on vibration by unbalance of grinding wheel and pulley in optimized spindle system is carried out to verify the validity of the combined bearing arrangement. Finally, the simulation of grinding process show that the surface roughness of workpiece with high damping spindle system is 60% better than with ball bearing spindle system.