This paper presents a new method of surface modification by electrical discharge machining (EDM) using composite structured electrode. Composite structured electrode is made of green compact product or sintered product. Since the apparent thermal conductivity of the electrode is very low, the wear rate of the electrode gets so high that the substance of the electrode is implanted into work surface by EDM. Some experiments of surface modification were performed on carbon steel as workpieces by EDM with the composite electrodes in hydrocarbon oil. Copper, aluminum and tungsten carbide were used for the material of the electrode in experiments. It was revealed that there existed the electrode material in the work surface layer with the thickness of several tens micrometers. These surfaces have less cracks, high corrosion resistance and wear resistance.