Tool condition affects the tolerances and the energy consumption and hence needs to be monitored. Artificial intelligence (AI) based data-driven techniques for tool condition determination are proposed. Unfortunately, the data-driven techniques are data-hungry. This paper proposes a methodology for classification based on unsupervised learning using limited unlabeled training data. The work presents a multi-class classification problem for the tool condition monitoring. The principal component analysis (PCA) is employed for dimensionality reduction and the principal components (PCs) are used as input for classification using k-means clustering. New collected data is then projected on the PC space, and classified using the clusters from the training. The methodology has been applied for classification of tool faults in 6 classes in a vertical milling center. The use of limited input parameters from the user makes the method ideal for monitoring a large number of machines with minimal human intervention. Furthermore, due to the small amount of data needed for the training, the method has the potential to be transferable.