An increasing attention is paid to STEP-NC, the next generation CNC controller interfacing STEP-compatible data. In this paper, we first propose an Architecture for the STEP-NC (called FBCC: Feature Baled CNC Controller) accepting feature code compatible with STEP-data, and executing NC motion feature by feature while monitoring the execution status. The main thrust of the paper has been to develop an automatic on-line tool path generation and modification scheme for milling operation. The tool path it generated iota each feature by decomposing into a finite number of primitive features. The key function in the new scheme is haw to accommodate unexpected execution results. In our scheme, the too1 path plinker is designed to have a tracing capability iota the tool path execution so that a new path can be generated from the point where the operation is stopped. An illustrative example is included to show the capability of the developed algorithm.