Micro-electrochemical machining (micro-ECM) can machine microstructures with excellent surface integrity on difficult-to-cut alloys. During micro-ECM, stray corrosion results in tapered sidewalls of machined structures. To suppress the stray corrosion, a novel tool electrode with the sidewall insulation of a gas film is proposed by fabricating the metal tool sidewall into a hydrophobic surface. The sidewall surface is designed to be characterized with spherical array cavities (radius of 500 nm) acting as the hydrophobic features, enhancing the gas-shielding effect of the gas film under electrolysis. The fabrication process of the hydrophobic sidewall is described in detail, including the self-assembly procedure of a monolayer template of Φ1 μm polystyrene microspheres, the copper-electroforming procedure for filling the microspheres' gaps, and the removal procedure for forming spherical array cavities. The fabricated tool electrode (Φ500 μm) obtains the hydrophobic features of a contact angle of up to 138°. As a result, bubbles generated on the tool surface can form an air-electrolyte interface instead of a dispersed bubble cluster. Micro-ECM experiments of microstructures verify that the novel tool electrode can improve machining accuracy by suppressing sidewall stray corrosion.