While measuring the roundness of work piece on the machine, the overall result of sensors contain the error of rotation axis and roundness error of work piece. By using the three-point method, one can separate the error of rotation axis from the overall result, and achieve the result of roundness error of work piece. However, the overall results are affected by the errors caused by inaccurate installation of sensors and therefore reduce the measurement accuracy. The object of this thesis is to modify the three-point method such that the errors of measurement caused by sensors installation are minimized. Numerical simulations as well as experiment are performed to validate the methodology. It is shown that the proposed method can minimize the errors of measurement caused by inaccurate installation.