Plasma processing is an important technology, which provides a capability to modify the material surface through etching, deposition, activation, functionalization, polymerization, etc. In the current plasma process, the reactive area of the sample is relatively large and thus a mask is needed for selectively treating the sample surface. As a result, the whole fabrication process has become more complicated. In this paper, a plasma integrated nanomanufacturing workcell, which consists of a microplasma source and an integrated atomic force microscopy (AFM) probe tip, has been developed to improve the current plasma apparatus design. The miniature microwave plasma discharge applicator is capable of creating a miniature plasma stream with a diameter ranging from 2 mm down to micrometers. Hence, with the new plasma apparatus it has become possible to locally treat a small area of the sample surface and simplify the fabrication process as the photomask is not required. Additionally, the AFM active probe can be precisely positioned on a desired surface to inspect and manipulate nanoobjects. Here, we report the design and implementation of this new system. Experimental results demonstrate the effectiveness of the system and show that the microplasma can be used in various applications including localized etching of silicon and diamond and localized patterning of photoresist.