A tool transfer mechanism for transferring a tool between a gateway position of a tool storage magazine and an exchange position adjacent a spindle which includes a base mounted on a frame, an actuator for rectilinearly moving the base, and a holding arm mounted on the base resiliently biased toward the tool to hold the same. The holding arm is moved outwardly to release the tool when the base is at the gateway position. The base is rotated in accordance with its rectilinear movement to change the posture of the tool between a first posture where the tool is parallel with remaining tools stored in the magazine and a second posture where the tool is parallel with the spindle.