This paper proposes a novel online workpiece height estimation system for reciprocated traveling wire-EDM by utilizing a discharge location detection (DLD) associated with a pulse discharge state detector. Based on the distribution of detected discharge locations, the workpiece height can be estimated. Furthermore, by utilizing the Richardson–Lucy super-resolution algorithm, the estimation error of workpiece height is reduced by 65%, from 3.30 mm to 1.15 mm for workpieces with a height of 10∼35 mm. During the verification experiments of cutting a stepwise workpiece and a hollow workpiece both with sharp height variations, the workpiece heights are estimated precisely and the machining efficiencies are improved by 27.9% and 74.5% respectively by adjusting the discharge gap servo control parameter according to the workpiece height estimation results. Since the DLD method proposed in this paper has not been found to be significantly affected by process parameters, the workpiece height estimation method and the corresponding adaptive control approach are feasible for industrial applications.