Single-crystal 4H-SiC is a typical third-generation semiconductor power-device material because of its excellent electronic and thermal properties. A novel polishing technique that combines plasma electrolytic processing and mechanical polishing (PEP-MP) was proposed in order to polish single-crystal 4H-SiC surfaces effectively. In the PEP-MP process, the single-crystal 4H-SiC surface is modified into a soft oxide layer, which is mainly made of SiO2 and a small amount of silicon oxycarbide by plasma electrolytic processing. Then, the modified oxide layer is easily removed by soft abrasives such as CeO2, whose hardness is much lower than that of single-crystal 4H-SiC. Finally a scratch-free and damage-free surface can be obtained. The hardness of the single-crystal 4H-SiC surface is greatly decreased from 2891.03 to 72.61 HV after plasma electrolytic processing. By scanning electron microscopy (SEM) and X-ray Photoelectron Spectroscopy (XPS) observation, the plasma electrolytic processing behaviors of single-crystal 4H-SiC are investigated. The scanning white light interferometer (SWLI) images of 4H-SiC surface processed by PEP-MP for 30 s shows that an ultra-smooth surface is obtained and the surface roughness decreased from Sz 607 nm, Ra 64.5 nm to Sz 60.1 nm, Ra 8.1 nm and the material removal rate (MRR) of PEP-MP is about 21.8 μm/h.