The multifunctional calibration and compensation device for the machine tool rotary axis is developed by using the non-contact optical hardware Laser R-Test with the principle of cosine law, and using SMB machine networking technology to make the system possess the ability to automatically write parameters through machine networking. Currently, the difference between the domestic verification and the foreign instrument verification is about 1/1000 degrees, and the cutting verification results are comparable to those of international manufacturers. The set-up time is greatly reduced to within 1 hour, that is, the eccentrical detection, angle positioning detection, and five-axis simultaneous error detection for the machine tool can all be completed during the set-up process. At present, this system can be connected to domestic and foreign controllers. It can automatically complete calibration and compensation and can effectively improve the accuracy of Taiwan's high-end multi-axis machine tools. Currently more than 20 collaborated machine tool and metal processing companies are using this device.