The traditional bonnet tool polishing approach is an efficient and controllable processing technology for flat, spherical, and aspherical surfaces, but it is not essentially designed for processing internal cylindrical surfaces. This paper proposes a novel cylindrical bonnet tool polishing (CBTP) approach for application to the inner surface of the bearing ring. Such an approach effectively employs a self-developed cylindrical bonnet tool with a small size through utilizing an appropriate abrasive slurry for polishing the internal part surfaces. Herein, the characteristics of the contact area are first methodically examined by finite element analysis (FEA) simulation. After that, a series of single-factor polishing tests are conducted to investigate the effect on the surface roughness and material removal. The results reveal that the combination of rotary and reciprocating movements is able to simultaneously improve the surface roughness and increase the material removal rate. The variations of the air pressure and tool offset to improve surface roughness and polishing efficiency are also carefully examined. The results indicate that relatively high material removal and better surface roughness can be achieved in the presence of longer polishing time and faster rotation speed. A surface roughness of 0.0265 μm can be obtained via a combination of SiC (1 μm) and CeO2 (0.5 μm) particles.