In the present study, efforts have been made to identify favorable conditions to enhance surface micro-hardness (MH) of En31 tool steel using Cu–W tool manufactured by powder metallurgy (PM) in electrical discharge alloying (EDA) process. Taguchi method was followed to get combination of six process variables for achieving best MH. Peak current emerged as the major factor to influence the MH of the alloyed layer, although tool polarity, percentage of alloying element in PM tool, pulse on-time, duty factor and discharge voltage were also found significant. MH measurement, scanning electron microscopy, optical microscopy, EDS and XRD were carried out to find micro-geometrical, micro-structural, chemical and mechanical changes in the machined surface. Under favorable conditions for MH, noteworthy enhancement in percentage of carbon and tungsten was observed. The presence of hard tungsten carbide ($$\hbox {W}_{2}\hbox {C}$$ W2C ) and cementite ($$\hbox {Fe}_{3}\hbox {C}$$ Fe3C ) on the machined surface were related to the observed substantial increase in MH ($$\sim 150\%$$ ∼150% ). Results indicated that MH improvement can be carried out devoid of any disadvantageous effect on surface quality using EDA process.