In order to realize high efficiency and high integration of the virtual manufacturing system and strengthen the integration of CAD/CAPP/CAM, the paper presents the architecture of virtual manufacturing oriented CAPP system and its realizing method. The method of parts information input is used for the system to connect with CAD directly. The system utilizes object-oriented knowledge representation method and database technology, establishes process knowledge database and carries on the effective management. Using the idea of modular, the virtual processing information can be fed back to design system in real-time, the process can be optimized it and form a closed loop CAPP system by using genetic algorithm. The virtual manufacturing technology of CAPP system enhances the design level and quality and improves the flexibility, scalability and dynamic adaptability of CAPP system.