Abstract: To improve the machining efficiency and dimensional accuracy of small hole drilling, a novel and efficient method of small hole short electric arc drilling (SEAD) by tube electrode is proposed. However, due to the mismatch between excessive arc discharge energy and feed rate, efficient and high dimensional accuracy small hole machining is fraught with difficulties. This paper reveals the mechanism of SEAD based on pulsed power supply, and analyzes the voltage-current waveform and cross-section topography of SEAD. In addition, the influence of different electrode polarity, voltage, pulse frequency, duty cycle, and electrode feed rate on material removal rate (MRR), relative electrode wear ratio (REWR), average diameter, and taper were investigated. Finally, an optimum combination of small hole SEAD parameters was obtained through a process parameter optimization experiment, which confirmed the machining performance of small hole SEAD. The experimental results show that under the optimal machining parameters, small hole SEAD achieves the highest MRR of 84.51 μm/s and a relatively low REWR of 29.34%. The minimum average diameter and taper of the machined small hole were 698.49 μm and 0.001 1°, respectively.