The proper selection of tolerances is an important part of mechanical design that can have a significant impact on the cost and quality of the final product. Yet, despite their importance, current techniques for tolerance design are rather primitive and often based on experience and trial and error. Better tolerance design methods have been proposed but are seldom used because of the difficulty in formulating the necessary design equations for practical problems. In this paper we propose a technique for the automatic formulation of the design equations, or design functions, which is based on the use of solid models and variational geometry. A prototype system has been developed which can model conventional and statistical tolernaces, and a limited set of geometric tolerances. The prototype system is limited to the modeling of single parts, but can perform both a worst case analysis and a statistical analysis. Results on several simple parts with known characteristics are presented which demonstrate the accuracy of the system and the types of analysis it can perform. The paper concludes with a discussion of extensions to the prototype system to a broader range of geometry and the handling of assemblies.