Taking CNC (computerized numerical control) lathe as research object, this paper aims at drawbacks of the allocation model based on traditional failure independence hypothesis, and a multi-factor reliability allocation is proposed considering failure correlation among subsystems. Copula theory was applied to failure correlation analysis, and reliability function of CNC lathe was established. According to the failure mode effects and criticality analysis (FMECA), traditional computational formula of criticality was modified. Allocation matrix was established considering several allocation factors to get allocation vector, and allocation vector and reliability function of CNC lathe was combined to get failure rates of all the subsystems. The allocation method was applied to a specific example of a CNC lathe, and results were analyzed and compared considering different situations of failure correlation. It can be concluded that the allocation results of failure rate considering failure correlation are better than those based on failure independence hypothesis. Therefore, the allocation method proposed in this paper is of great significance in reducing the costs for design and manufacture of subsystems of CNC lathe.