The present study reports the outcome of experiments conducted to investigate the effect of parameters on improvement in the material removal rate (MRR), reduction in the tool wear rate (TWR), and overcut size for commonly used die steels. To overcome some of the shortcomings of electric discharge machining (EDM), an approach of powder mixing in dielectric fluids is adopted to investigate the influence of process parameters. The addition of powders in dielectric improves MRR and lowers TWR significantly. Powder concentration, current, and pulse-on time are three significant factors affecting MRR, TWR, and overcut size. An increase in powder concentration improves the process performance, but is limited by the possibility of arcing at higher concentration. Use of the powder resulted in increased effective spark length causing larger overcut. The problem is acute in trials conducted at high pulse-on duration with high powder concentration that leads to a ragged surface at cut edges. Furthermore, electrode tools with smaller tip included angle resulted in larger profile deviation at the machined surface as compared to trials conducted using tools with higher included angle. Surface morphological changes, grain size, microstrain, and material migration were investigated using SEM, XRD, and EDS analysis and a significant improvement in properties of the machined surface was observed.