In this study, the ultrasonic-assisted powder electrical discharge machining (US-PMEDM) process was applied to investigate the machining performance and surface modification of 7Cr13Mo steel. The machining parameter such as peak current and pulse duration was varied to explore their effects on surface morphology, surface roughness and micro hardness, compared with these of EDM process. The ultrasonic vibration adhered to the workpiece with TiC powder suspended in the dielectric. The surface morphology and the cross section morphology of the machined surfaces were observed by scanning electron microscope (SEM). Surface roughness was measured by TR200 roughness device with five different positions, and the FM800 vickers hardness tester was used to measure the micro hardness. The results showed that the US-PMEDM process has better surface quality with fewer micro cracks as compared with that of EDM process. As pulse duration increased, the discharge craters became shallower with larger diameters, more micro cracks formed on the US-PMEDMed surface when the pulse duration increased to 120 μs. With the increase of peak current, the continuous uniformity of the recast layer thickness on US-PMEDMed surface got worse, the thickness of recast layer even increased to more than 10.30 μm with the increasing pulse duration. The recast layer of US-PMEDMed surface was denser and more consistent and had a better combination with the matrix. The surface roughness of US-PMEDM process was increased with the increase of peak current and pulse duration. Compared with EDM process, the surface roughness of US-PMEDM process decreased by about 40%. The micro hardness was increased with the increase of peak current, and with the increase of pulse duration, the micro hardness increased firstly and then decreased. The micro hardness was increased by a maximum of about 50% as compared to that of EDM process. The results indicate that ultrasonic vibration combined with TiC powder in the dielectric improves the machining environment, thus the machining performance and the micro hardness are improved by US-PMEDM process.