A management method for a cutting tool of a machine tool is provided. A user host imports a graphical data of a workpiece and a cutting tool database into CAM, and a user may select cutting tools to establish a complete machining process. T codes are replaced with electronic tags. Before executing a machine code comprising the electronic tags, the machine tool re-scans the cutting tools assembled at a tool turret and updates cutting tool arrangement information to ensure that the tool turret is equipped with the cutting tools used in the machining process. When the machine tool stores the electronic tags, a ready message is displayed for reminding an operator. When the electronic tags are not stored, the current storage location of a cutting tool lacked in the machining process or a warning message is displayed at the operation interface for reminding the operator.