A novel turbine motor spindle assembly for a spindle-mounted pneumatic tool, especially in a live tool environment is described. The novel turbine motor spindle assembly includes a manifold with a front end and a rear end. The manifold includes an air intake passage for receiving pressurized air. The pressurized air is directed axially through a drive shaft rotatably coupled to the front end. The pressurized air drives a turbine motor assembly and a drive shaft. The drive shaft is mounted inside a housing is self-lubricating. The turbine motor assembly includes tangential openings for expelling exhaust air therefrom. The turbine motor housing is mechanically coupled to the front end of the manifold with an exhaust air passage for directing exhaust air from the one or more tangential openings out through the rear end of the manifold.