Compacted graphite iron (CGI), which is used as a potential material in the auto industry, is a hard-to-machine material for the different minor elements and for the geometry of graphite with grey cast iron. The machinability of CGI in the drilling process was investigated with a 4-mm diameter fine-grain carbide twist drill under four lubrication conditions, dry (no compressed air), dry (with compressed air), MQL 5 ml/h, and MQL 20 mL/h in this paper. The maximum flank wear, types of wear, and cutting loads were studied for identifying the wear mechanism in drilling of CGI. The tool life in the four experiments of CGI drilling is 639 holes, 2969 holes, 2948 holes, and 2685 holes, respectively. The results showed that the main wear mechanism in drilling of CGI is adhesion and abrasion. Carbon, which originates from the graphite of CGI, can improve the lubrication in the drilling process by comparing with MnS in drilling grey cast iron. The thrust force and torque are more than 1000 N and 150 N*cm after 2700 holes in CGI drilling. Drilling of CGI under dry conditions (with compressed air) and MQL 5 ml/h is feasible.