Virtualization is critical for resource sharing and dynamic allocation in cloud manufacturing, a new service-oriented networked collaborative manufacturing model. In this paper, an effective method is proposed for manufacturing resources & capabilities virtualization, which contains manufacturing resources modeling and manufacturing cloud services encapsulation. A manufacturing resource virtual description model is built, which includes both nonfunctional and functional features of manufacturing resources. The model provides a comprehensive manufacturing resource view and information for various manufacturing applications. The OWL-S is adapted to an upper level ontology model, according to which manufacturing resources & capabilities are encapsulated into manufacturing cloud service. The proposed method is applied to the virtualization process of an aerospace company. Effectiveness and efficiency are illustrated for the manufacturing cloud services discovery and management.