Abstract: An automated method and apparatus for electrode discharge machining wherein method includes moving the tool holder to the electrode loader, automatically mounting an electrode into the tool holder and then testing the electrode for conformance to geometric and dimension tolerances and testing the electrode for proper alignment in the tool holder and thus proper alignment relative to the workpiece just prior to moving the tool holder to the workpiece area for machining. The apparatus includes a moveable servomechanism with a tool holder, an electrode magazine, and a sensor module for testing an electrode mounted in the tool holder. The sensor module has a recess configuration of conductive material complimentary to the electrode such that the electrode will make contact with the conductive material when inserted into the sensor module if the electrode is out of tolerance or misaligned in the tool holder.