In order to help design engineers to adopt the Geometric Dimensioning & Tolerancing (GD&T), this paper develops a stepby-step method for tolerance design based on the function of the product and its parts. The procedure of this method consists of (1) analysis of functions using Key Characteristics (KC) and Datum Flow Chain (DFC), (2) selection of datum features, and (3) the selection of geometric tolerance types based on the functions. The rules and guidelines for the two latter steps are given and explained in detail, in order that the design engineer can understand the reasons for the rules and use them effectively. The method presented in this paper differs from other previous work, as it is based on the functions, whereas we note that previous work typically focuses on the automation of the tolerancing task without due consideration of functions. The paper also illustrates the developed method through two case studies: an axle-wheel assembly model and a simplified refrigerator model. This geometric tolerance design method is not complete yet in the coverage of various tolerances, e.g. size tolerances and profile, but may assist the beginning design engineer developing a mastery over GD&T.