To achieve an efficient small-hole EDM process, an accurate pulse monitoring strategy and a precise control are both required. In order to improve the efficiency and stability of the small-hole drilling process, an adaptive control system with a self-tuning regulator is developed. A high-speed EDM pulses monitoring system based on wavelet transform is implemented to measure the gap status, whose output is adopted as the feedback signals of the adaptive control system. The discharge waveforms are recorded and analyzed. The experimental results demonstrate that the arc pulse ratio during small-hole drilling process is reduced remarkably. The machining efficiency as well as the machining quality is improved significantly.