The bubble formation process during electrical discharge machining (EDM) is affected by the dielectric and the magnitude of the flow rate. At present, the bubble dynamic characteristics during material removal are insufficiently characterized in existing studies. In this study, the bubble formation processes of the workpiece and the dielectric were simulated based on the model of dielectric flushing three-phase flow for EDM with different dielectrics and flow rates, and the bubble pressure, bubble characteristics, and material removal mechanism were analyzed. Meanwhile, the flow rate experiments with single pulse discharge in de-ionized water and dielectric flushing experiments were carried out to verify the material removal mechanism in the above EDM in liquid. These results showed that both the debris accumulation and the dielectric flushing effect can delay the bubble explosion by impacting bubble pressure. The degree of bubble expansion and the volume of molten fluid determine the size of the molten region together. The weakening of the impact effect of the molten fluid promotes stable bubble growth while decreasing the bubble growth rate. The material removal contribution of the dielectric bubble is higher than that of the workpiece bubble, 80% of the molten material is discharged through the dielectric bubble by enhancing the dielectric flushing. There are more frequent evolution behaviors of bubble dynamics in de-ionized water and emulsion in a growth period than in kerosene. The study of these bubble behaviors revealed a more detailed understanding of the three-phase flow system in EDM, providing a foundation for the improvement of both EDM efficiency and material quality.