This paper presents the development process of a new coating method for micro pencil grinding tools (MPGTs). MPGTs, applied for microgrinding, consist of a base body, abrasives, and a metallic bond. The manufacturing process of these microtools presents two challenges. The first being in finding a method to embed the abrasives with a uniform grit distribution and the second finding the correct parameters, required for a bond with adequate grit retention forces. In this research, an electroless plating process is presented. Both the abrasive grit distribution method and the plating parameters will be presented in this paper.