Electro-discharge drilling is a key technology for manufacturing sophisticated nozzles in a broad range of automotive and aerospace applications. The formation of debris in the working gap leads to arcs and short circuits on the lateral surface when state-of-the-art tool electrodes are used. As a result, limited drilling depth, increased linear tool wear, and the conicity of boreholes are still challenges. In this work, a new approach for the passivation of the lateral surface of copper tool electrodes by oxidation is shown. The comparison with state-of-the-art tool electrodes showed a reduction in the erosion duration by 48% for machining hardened steel. Promising improvements could be achieved by the thermal oxidation of the tool electrodes with the aim of increasing the electrical resistivity of the lateral surface of the tool electrode. However, due to the loss of strength, the high oxide layer thickness, and the partial delamination of the oxide layer, further comprehensive investigations on the influence of the oxidation temperature need to be conducted. Future adjustments with lower oxidation temperatures will be carried out.