Many manufacturing processes utilize on-line microscopy. Microscopes (optical systems with magnification greater than one) align, inspect and guide robotic assembly of precision parts. Microscopes are quite different from cameras with smaller magnifications. To provide the resolution required to image fine detail, a microscope has a relatively large numerical aperture (NA). This in turn restricts the microscope's depth of field. The positive magnification also means the distance from lens to image sensor is larger than with a camera lens. Effective design of machine vision microscopes requires an understanding of these differences. Some parameters have a great effect on the cost and complexity of the optical system; others are almost "for free." Many applications can use cost-effective off-the-shelf optics. Image multiplexing and auto-focusing solve otherwise intractable problems. We consider both design principles and case studies to illuminate on-line microscopy.