Accomplishment of high machining rates along with good surface quality is a major concern in electric discharge machining process. Powder-mixed electric discharge machining in which suitable powder particles are impregnated in dielectric has gone forth as a potential solution to this problem. Nevertheless, challenges such as dielectric circulation, homogeneous blending of the powder particles in the dielectric, debris removal and quantity of the powder material required have to be addressed carefully before implementing this process on a large scale in the manufacturing industry. Extensive research in the field of electric discharge machining using powder-suspended dielectrics has started only in the recent years. In this article, a comprehensive review of the research going on in the field of powder-mixed electric discharge machining is presented. The emphasis is given on powder-mixed electric discharge machining mechanism, influence of powder characteristics and machining parameters on various responses. Some of the major application areas, variants of the basic powder-mixed electric discharge machining process and possibilities of further improvement are also discussed.