Sustainability has been attracted extensive attention in manufacturing industry for the increasing excessive resource consumption and serious environmental pollution. The assessment of sustainable manufacturing capability is a vital factor, especially in cloud manufacturing, in which the capability assessment of the manufacturing resources is the premise of selecting the optimal manufacturing services. While the CNC machining tools are the basic manufacturing resources in production process, so the dynamic assessment of their sustainable manufacturing capabilities is investigated in this paper. A set of indicators is established considering manufacturing sustainability and a new dynamic assessment model is proposed based on a modified “vertical and horizontal” method. The model is verified through a case study and it can comprehensively evaluate the capability performance of the CNC machining systems, and also effectively follow the dynamics of their production activities.