Miniature/micro-drilling of holes is increasingly utilized in manufacturing. While non-conventional machining methods (laser and spark erosion) were applied successfully for micro-drilling, mechanical drilling still of interest to industry due to its unmatched geometrical accuracy. However, tool wear and burr formation would hinder the economics of mechanical drilling supremacy. Hence, the need for understanding of tool wear, burr formation and cutting forces progression with process variables is a step towards comprehensive modelling of micro-drilling mechanics and subsequent enhanced process economics. The current research details experimental trials involving mechanical drilling of steel 1008/CR4 using twin-fluted twist drills of diameters 0.5, 1 and 1.5 mm. Full factorial design of experiments was utilized, and analysis of variance was accomplished to study the effects of feed rate and tool diameter (each of them at 3 levels) on tool flank wear and drilled hole quality. Entry and exit burr heights were increased by 80–150% when tool diameter and feed rate were two times higher. Progression of tool flank wear and usage of bigger tool diameter conversely reduced hole surface roughness. In addition, tool flank wear was increased when reducing of feed rate and using larger tool diameter. Catastrophic failure of 0.5-mm-diameter tool was noticed (after drilling of 46 holes at high feed rate level and after drilling of 97 holes at low feed levels) due to chip packing/jamming in the insufficient flute area.