The objective of this research is to develop a measurement error compensation method for On-Machine Measurement (OMM) process based on a closed-loop configuration. Geometric errors of vertical machining center are measured using ball-bar system, and probing errors are measured using master ball. The errors are represented using homogeneous trans-formation matrices and the closed-loop configuration method is applied to calculate 3-dimensional errors. To verify the effectiveness of the method proposed in this research, compensated results are compared to the data using CMM process, and the results are analyzed. The results show the proposed method can be applied in OMM process to make the measured data more reliable.