A compact apparatus and effective method for the cold sterilization and lubrication of a dental handpiece. By virtue of the present invention, a dental handpiece may be sterilized in a relatively short time without exposing the turbine assembly thereof to possible degradation, as has heretofore been caused by conventional methods of sterilization which utilize either high temperature or harmful chemicals. A unique pneumatic pump is described for pumping a supply of liquid sterilant through the interior of the handpiece and past the turbine assembly for destroying harmful bacteria. Next, a supply of water is pumped through the handpiece to flush away any sterilant residue. Lastly, a supply of turbine oil is passed through the handpiece to lubricate the turbine assembly and the components (e.g. bearings) thereof. Therefore, a dental handpiece may be quickly and efficiently sterilized and lubricated, so that a dentist will be more likely to sterilize the handpiece after each use, whereby to prevent the possible spread of disease from one patient to another.