A new modeling method was presented to smooth over the difficulties of thermal error modeling on computerized numerical control (CNC) machine tools. This method separates the thermal error into static error and error influenced by temperature alteration, then modeling separately, finally  the two parts are combined into an integrated thermal error prediction model. Applying this model in a typical three axis CNC milling machine for thermal error prediction, the result shows that it can accurately predict the thermal error under any given temperatures and coordinates. With an innovative real time compensation system, using the predicted error to carry out the real time compensation experiment, the compensation effect validates that the thermal error can be significantly reduced.