The invention primarily concerns improvements to turning, grinding milling and other machining processes using electro-optical sensors for analyzing images or patterns related to tools used to work objects. Also disclosed are unique electro-optical sensing methods and apparatus in their own right, capable of high accuracy measurement required for modern industry. In a preferred embodiment of the invention, a two axis image analysis of the backlit tool edge is performed to determine tool position, damage, or wear, and where desired appropriate control steps taken to reposition or change the tool. In another preferred embodiment the tool itself is equipped with optically sensed contact members according to the invention to measure the part produced with the tool, or to determine the deflection of the tool.