This paper deals with a new methodology for topology optimization in which the topology of the design domain may change during the shape optimization process. To achieve this, the concept of the topological gradient is introduced to compute the sensitivity of an objective function when a small hole is drilled in the domain. Based on shape and topological sensitivity values, the shape and topology of the design domain may be simultaneously changed during design iterations if necessary. To verify the advantages and also to facilitate understanding of the method itself, two electrostatic design problems have been tested by using 2D finite element analysis: the first is the inverse problem of a simple dielectric model and the second is the rotor design of a MEMS actuator.