A reliable and practical monitoring of drill breakage is a crucial technique in automatic machining system. In this study, a real-time monitoring system was developed to predict drill breakage using both spindle and z-axis motor current. Drill breakage is monitored by detecting the level of residual motor current which is obtained through the moving average filter algorithm. The residual exhibits a feature of sharp decrease just before drill breakage. Therefore, drill breakage can be predicted by detecting this characteristic of residual component. Z-axis motor current is better to predict the drill breakage than spindle motor current, because the former is faster in response than the latter when drill breakage is occurred. The evaluation experiments have shown that the developed monitoring system works very well.