In this chapter, we study the effect of machine sharing on performance of traditional cellular manufacturing systems. We present analytical models for evaluating the desirability of sharing machines of the same type among two or more cells. The impact of machine sharing on several performance measures, such as machine utilizations, cell production rates, and part flow times is investigated under varying conditions of system loading, setup time, batch sizes, and demand and processing variability. Conditions under which machine sharing may be of value and the operating requirements necessary for realizing this value are identified. A methodology for trading off costs and benefits of machine sharing and determining optimal sharing levels is also presented. The sensitivity of these results to different scheduling policies is examined.