Based on the evaluation of dynamic performance for feed drives in machine tools, this paper presents a two-stage tuning method of servo parameters. In the first stage, the evaluation of dynamic performance, parameter tuning and optimization on a mechatronic integrated system simulation platform of feed drives are performed. As a result, a servo parameter combination is acquired. In the second stage, the servo parameter combination from the first stage is set and tuned further in a real machine tool whose dynamic performance is measured and evaluated using the cross grid encoder developed by Heidenhain GmbH. A case study shows that this method simplifies the test process effectively and results in a good dynamic performance in a real machine tool.