This article presents the dynamic design and thermal analysis of an ultra-precision flycutting machine tool. The hydrostatic bearings are used both in the spindle and slide to ensure the stiffness of the machine tool. The fluid–structure interaction method is used to obtain the actual clearance changes of the hydrostatic bearing. The dynamic and thermal performances of the machine tool are analyzed considering the effect of hydrostatic bearings. The influence of the thermal effect on the static and dynamic performance of the machine tool is further studied. The prototype machine tool is built. Preliminary machining trials have been carried out and provided evidence of fluid–structure interaction method being helpful to design the ultra-precision machine tool based on the hydrostatic technology.