<p>Composite materials—ranging from ceramic-based to polymer-based—have gained significant traction in advanced industries due to their superior mechanical properties, corrosion resistance, and design flexibility. However, machining such materials using conventional cutting or even traditional electrochemical machining (ECM) often encounters severe challenges, especially when the composites are non-conductive. Electrochemical Discharge Machining (ECDM), also known as electrochemical spark machining, has emerged as a hybrid process that facilitates material removal through electrochemical action and localized spark discharges, thus enabling the machining of non-conductive or low-conductive composites. This review collates and critically examines the current state of ECDM applied to composite materials, covering fundamental principles, process mechanisms, key parameters, and resulting surface characteristics. It further explores environmental aspects, recent technological developments, and prospective applications in various industrial sectors. Through an analysis of representative literature, this paper provides insights into research gaps—such as optimization of bubble dynamics, reduction of heat-affected zones, process scalability, and electrolyte recycling—and outlines potential future directions. The findings emphasize that ECDM holds promise for precise, efficient, and sustainable fabrication of advanced composite components with complex geometries.</p>