The invention provides a machining electrode for annular holes and a machining method. The electrode comprises an electrode rod, a connecting rod and an electrode head, wherein one end of the connecting rod is connected with the electrode rod, the electrode head is arranged at the other end of the connecting rod, and the end of the connecting rod, which is connected with the electrode head is of a circular arc; in the machining electrode for the annular holes and the machining method, the electrode head is made of red copper material, the consumption of red copper is reduced, and the materialcost is reduced; furthermore, rough machining and fine machining share one electrode rod, so the electrode rod can be reused by replacing the electrode head, the operation is simple, and the non-uniform abrasion of the electrode is reduced; furthermore, the machining of a whole part is completed during one-time clamping, so batching of the part or secondary alignment of the electrode is avoided, the alignment time is reduced and the uniformity of the fine machining allowance is ensured.