Abstract: Fewer operators, more automated and intelligent operating model has become the key of oil industry revolution. However, affected by mechanical properties of bottom hole assembly (BHA), measuring tools installed upstream of the screw, cannot obtain the actual motion parameters of drilling bit. It leads to a serious data bias and unpredictable implementation risk at Intelligent drilling decision-making and auto-controlling. A probe type Intelli-Bit measuring device was developed in this paper, which can be installed inside the bit and obtain the real motion data of bit without any change on the traditional BHA and operating processing. Via the numerical simulations, hardware structure was optimized. The theoretical hydraulic pressure loss is reduced to less than 0.1 MPa, and the safety factor is raised to 3.06. Six-sided method, low-order ARMA model and moving Kalman filter was also utilized to reduce errors of measuring device. After that, 9 field tests were carried out in Shengli Oilfield, which improved the effectiveness and reliability of the developed system in bit working condition diagnosis and drilling parameter optimizations.