The paper introduces the LIP-MM process and compares its micro-machining capabilities with micro-EDM in the machining of micro-channels. While, micro-EDM is a well-established micro-manufacturing process and has been at the center of research for the last 15 years, the LIP-MM is a newly developed micro-machining process. Although both processes utilize plasma to perform micro-machining, differences in their plasma generation mechanism and hence differences in their plasma characteristics lead to differences in their micro-machining capabilities. For comparative assessment of their micro-machining capabilities, micro-channels were machined by the two processes at similar pulse energy levels, while other process parameters were maintained at their optimal values, depending on the respective experimental setups used. The comparative assessment was based on the geometric characteristics of the micro-channels, material removal rate (MRR), productivity in the machining of micro-channels, effect of tool wear, and the range of machinable materials for the two processes.