In the process of customizing of CAD system for parametric product design, the modeling technology of product knowledge, the KBE (Knowledge Based Engineering) application architecture and technologies was studied. This paper proposed the classification standard for product knowledge base upon the methods of defining and representing ontological knowledge and procedural knowledge. Depending on the logic of product knowledge model, the function architecture of KBE software package embedded in CAD system has been constructed. Some practical technologies have been illustrated, like the visual interactive 3D annotation user interface base upon engineering semantic symbol, which can actualize the acquisition, representation, and ratiocination of knowledge. Using NXTM Open C and KF (Knowledge Fusion) as program language, all the methods for knowledge manipulation can be carried into execution in CAD system.