The invention relates to a precise small hole machining mechanism and a method for manually machining a precise small hole. The mechanism comprises a lathe body, a lathe spindle, a lathe tailstock, a hand wheel, a guide rail and a tailstock locking handle, and the lathe tailstock is slidably connected to the guide rail. The mechanism further comprises a drill chuck, a chuck handle, a guide sleeve and a tailstock taper tube; the drill chuck and the chuck handle are fixedly connected, the left portion of the guide sleeve is provided with a cylindrical guide hole, and the right portion of the guide sleeve is provided with a tapered body with the Morse taper; the chuck handle is in clearance fit with the guide hole, the tailstock taper tube is provided with a tapered hole with the Morse taper, the tapered body of the guide sleeve is in Morse taper fit with the tailstock taper tube, and the hand wheel drives the tailstock taper tube through a screw-nut mechanism. According to the mechanism, the drill chuck only needs to be hand-held to do straight reciprocating motion on the premise that the machining precision is guaranteed, the labor intensity is low, and the machining efficiency is high; as the hand directly makes contact with the drill chuck, the stress condition of a drill bit can be intuitionally felt in real time, real-time adjusting can be conducted, the condition that the drill bit (or a screw tap) is damaged due to the fact that the stress is too large is avoided, and the product qualification rate is increased.