In this paper, Blasting Erosion Arc Machining (BEAM) was applied to perform high efficiency rough machining of difficult-to-cut materials such as Ti6Al4V and TiAl alloys. In order to investigate the influence of BEAM on workpiece surface quality and material properties, the formation mechanism of residual stress was studied based on simulations and experiments. First of all, a thermo-elastoplastic simulation model was established to predict the residual stress after discharging. Then, a single arc discharge experiment was carried out under different discharge parameters. The results showed that after discharging, a high tensile residual stress existed on the surface, and the peak value increases with the increasing of discharge energy. The highest tensile residual stress of Ti6Al4V could reach up to 679 MPa when the peak current was 500 A and the pulse duration was 8 ms. The residual stress of Ti6Al4V decreases rapidly beneath the machined surface and is close to the material matrix at the depth of 700 μm. But for TiAl, the residual stress increased first and then decreased with increasing depth. A probable reason for the difference is that longer and wider cracks existed on the surface of TiAl and they can release residual stress partially. The simulation predicted the large tensile residual stress and the trend of residual stress distribution, which agrees well with the experiment results.