A study was conducted to utilize the engineering properties of walnut shells and kernels at 14% and 5% moisture content (wb) to design, develop and evaluate walnut cracker and separator machine. The average bulk density of shells (228–242.7 kg m−3) and kernels (401.7–414.2 kg m−3) along with mathematical calculations and review of literature was used to conceptualize working components of universal walnut cracker and separator machine. The machine comprised of feeding hopper, cracking rollers, separation tray, main frame, power transmission system and collection tray. The functional performance of the developed prototype was tested in terms of rotational speed of the cracker (75, 85 and 95 rpm) and amplitude of vibration (55, 65 and 75 mm). The economic parameters of operational cost, breakeven point, benefit-cost ratio and pay back period were also calculated. The optimum conditions were obtained with the help of design expert 10.0.1 and response surface methodology. A cracker speed of 85 rpm and vibrational amplitude of 65 mm resulted in throughput capacity of 15.98 kg h−1, 86.0% cracking efficiency, 74.0% separation efficiency, 81.34% kernel recovery, 18.6% kernel damage, 62.74 man-hours ton−1labour requirement and 1136.7 MJ ton−1 energy consumption. The operating cost of the machine was 67.73 Rs h−1, benefit cost ratio 1.35, breakeven point at 5001.8 kg and payback period of 1129.8 h, respectively. This machine can be beneficial for income augmentation of walnut growers and rural employment through custom hiring centres.