In this paper, a multi-step optimization using genetic algorithm with variable penalty function is introduced to the structural design optimization of a grinding machine. The design problem, in this study, is to find out the optimum configuration and dimensions of structural members which minimize the static compliance, the dynamic compliance, and the weight of the machine structure simultaneously under several design constraints such as dimensional constraints, maximum deflection limit, safety criterion, and maximum vibration amplitude limit. The first step is shape optimization, in which the best structural configuration is found by getting rid of structural members that have no contributions to the design objectives from the given initial design configuration. The second and third steps are sizing optimization. The second design step gives a set of good design solutions having higher fitness for lightweight and minimum static compliance. Finally the best solution, which has minimum dynamic compliance and weight, is extracted from the good solution set. The proposed design optimization method was successfully applied to the structural design optimization of a grinding machine. After optimization, both static and dynamic compliances are reduced more than 58.4% compared with the initial design, which was designed empirically by experienced engineers. Moreover the weight of the optimized structure are also slightly reduced than before.