To address the difficulty in detecting the discharge state of a narrow pulse width and small duty cycle pulse, in this study, we investigate the variation characteristics of the inter-electrode impedance in the micro-EDM process and propose a detection method to distinguish different discharge states in micro-EDM based on the change in electrical signal caused by the change characteristics. The influence of the pulse width and duty cycle on the quality of micro-EDM is summarised. The results show that the workpiece surface machining quality can be considerably improved by compressing the pulse width of the pulse power supply. A micro-EDM discharge state detection system based on the variation characteristics of the inter-electrode impedance is designed, and experiments verify the detection method. The control strategy of the discharge state detection system is analysed, and a control strategy based on the forward direction and discharge state is proposed. The machining effect of the control strategy is tested through a trial-machining experiment. According to the machining control strategy, the control signal is outputted, which can realise a stable and efficient micro-EDM process.