The main purpose of this study was to develop observation techniques and processing technology for the electrochemical discharge machining (ECDM) of sapphire wafers. To measure the effect of gas-film thickness, discharge-spark conditions, and droplet sliding frequency on machining quality and efficiency in ECDM, this research utilized high-speed cameras to observe the gas film thickness and formation of the gas film during ECDM. Additionally, this study observed the machining-gap phenomena during ECDM. The formation mechanism and machining characteristics of the gas film were understood through experiments. The machining parameters included the liquid level, working voltage, rotation speed, and duty factor. This study analyzed and discussed the effect of each machining parameter on the gas-film thickness, current, electrode consumption, and droplet sliding frequency. Moreover, this study aimed to obtain optimized machining parameters to overcome the difficulty of machining sapphire. The experimental results indicated that utilizing a high-speed camera to capture the phenomena between electrodes during electrochemical discharge could effectively observe the gas-film thickness and the coverage of the gas film. A higher bubble coalescence rate enhanced the machining capability and reduced the lateral discharge. Therefore, this study could obtain better machining-hole depths through observation and analysis to improve gas-film stability and machining capability. This study demonstrated that a liquid level of 700 µm, a working voltage of 48 V, a duty factor of 50%, and a tool electrode rotational speed of 200 rpm could achieve a hole depth of 86.7 µm and a hole diameter of 129.5 µm.