A diagnostic communication system for machine tools interlinks a computer controlled machine tool with diagnostic and analysis equipment located at a location remote from the machine tool. The computer associated with the machine tool is connected with the diagnostic apparatus over a telephone line, and the machine tool is caused to execute a predetermined routine as a result of instructions transmitted to the computer from the diagnostic apparatus. The operating characteristics of the machine are monitored during the operation of the machine, and are communicated to the diagnostic apparatus, where they are compared with corresponding characteristics previously collected for the same machine, and with design limit parameters. Such comparisons furnish an indication of the present operating condition of the machine tool, and establish trends, which are useful in identifying the nature and location of incipient faults or failures before they occur. The system is used both as a diagnostic tool for diagnosing abnormal machine conditions and as a preventative maintenance tool for performing preventative maintenance operations on a routine basis.