Abstract: Aimed at developing an internet based ICAID system for NC machine tools, the knowledge representation and application in the industrial design process are presented in paper. In the design process, the experiments design to acquire implicit knowledge or specific knowledge are carried out, using the verbal reports analysis method which can detect the cognition and thinking in the design process through analyzing the verbal reports of the subjects. Based on the analysis of the experimental results, the methods of knowledge framework in ICAID system, main functional modules and operational flow of ICAID system are developed continuously. In view of the particularity of industrial design process, we structure the technology framework of ICAID system based on internet, and user can retrieve knowledge base and database of the system online and fulfill the concept design in the environment of the network.