This paper proposes a LuGre Model-Based Neural Network (MBNN) friction compensation algorithm for a linear motor stage. For matching the friction phenomena in both the motion-start region and the motion-reverse region, the LuGre dynamic model is employed into the proposed compensation algorithm. After training of the model-based neural network is completed, the estimated friction for compensation is obtained. From the obtained result we find that the new structure gains advantage over the non-friction compensation system on the performance of the compensator in both regions. The proposed compensator is evaluated and compared experimentally with an uncompensated system on a microcomputer controlled linear motor tracking system in the final section of the paper. The experimental results show the improvement on the maximum velocity error and the root mean square tracking error in the motion-start region ranges from 34% to 53% and from 53% to 75% respectively, and in the motion-reverse region from 48% to 65% and from 79% to 90% respectively.