Axial piston machines are widely used in the industry ranging from aerospace, agriculture, automotive, heavy machinery, etc. These applications require better pumps and motors to meet current market demands such as higher power density in hydraulic units, smarter pumps (diagnostics and prognostics), higher efficiencies, and compactness. The current state-of-the-art in pump design is mostly based on heuristic design approach with very limited use of numerical toolssince the invention of this positive displacement machine until the present time. The numerical tools being used do not capture the physical phenomena in the thin fluid film between the rotating group components. The work presented in this dissertation aims to demonstrate the feasibility of virtual prototyping utilizing a combination of in-house developed multi-domain models and to propose a novel computational based design methodology for axial piston machines. The methodology is an iterative process between the virtual components in 3D CAD models and the function evaluations for the design requirements utilizing the numerical models which provide an accurate prediction to the behavior of the mechanical components working together. To validate the proposed methodology a case study on a 24 cc/rev axial piston machine was carried out. The machine was built virtually, simulated,and optimized for desired performance. A physical prototype was built based on the case study and tested successfullyfor forty-five operating conditions.