This paper presents dimensional synthesis design theory for a novel planar 3-DOF (degrees of freedom) parallel machine tool. Closed-form solutions are developed for both the inverse and direct kinematics. The formulation of the dexterity and the definitions of the theoretical workspace and the valid workspace are used to analyze the effects of the design parameters on the dexterity and workspace. The analysis results are used to propose an approach to satisfy the platform motion requirement while realizing orientation capability, dexterity and valid workspace. A design example is given to illustrate the effectiveness of this approach.