When measuring the residual stress within a component using the electrical discharge machining (EDM) strain-gage method, a metallurgical transformation layer is formed on the wall of the measurement hole. This transformation layer induces an additional residual stress and therefore introduces a measurement error. In this study, it is shown that given an appropriate set of machining conditions, this measurement error can be compensated directly using a calibration stress factor computed in accordance with the properties of the workpiece material. It is shown that for EDM machining conditions of 120 V/12 A/ (discharge voltage/pulse current/pulse-on duration/pulse-off duration), the hole-drilling induced stress reduces with an increasing thermal conductivity in accordance with the relation and increases linearly with an increasing carbon equivalent (CE) in accordance with . Therefore, a given knowledge of the thermal conductivity coefficient or carbon equivalent of the workpiece material, an accurate value of the true residual stress within a component can be obtained simply by subtracting the computed value of the calibration stress from the stress value obtained in accordance with the EDM hole-drilling strain-gage method prescribed in ASTM E837.