Electrical discharge machining (EDM) is a rapidly evolving method in modern industry that manufactures highly complex components. The physical properties of a tool electrode material are significant factors in determining the effectiveness of the process, as well as the characteristics of the machined surfaces. The current trend of implementing graphite tool electrodes in manufacturing processes is observed. Innovative material engineering solutions enable graphite production with miniaturized grain size. However, the correlation between the graphite electrode grain size and the mechanism of the process removal in the EDM is a challenge for its widespread implementation in the industry. This research introduces a new method to evaluate the impact of the graphite electrode grain size and machining parameters on the material removal effectiveness, relative tool wear rate, and surface roughness (Ra) of Hastelloy C-22 following EDM with negative polarity. The study utilized new graphite materials with a grain size of 1 µm (POCO AF-5) and 10 µm (POCO EDM-180). An assessment of the impact of the EDM process parameters on the technological parameters and the development of the surface roughness was carried out. Electrical discharge machining with fine-grained graphite electrodes increases process efficiency and reduces tool wear. Graphite grains detached from the tool electrode affect the stability of electrical discharges and the efficiency of the process. Based on the experimental results, mathematical models were developed, enabling the prediction of machining effects to advance state-of-the-art manufacturing processes. The obtained mathematical models can be implemented in modern industrial EDM machines as guidelines for selecting adequate machining parameters depending on the desired process efficiency, tool wear rate, and surface roughness for advanced materials.