The research on the driving principle and economization of energy of electro-hydraulic hammer is discussed. By means of the Balance chart of energy, the method and formulas to calculate every level efficiency and the total efficiency of steam drived hammer are formed. With the aid of actual data of plants, the actual efficiency of steam drived hammer is got. The working principle and the driving system of electro-hydraulic hammer are introduced. The procedure of energy transfer of this hammer is analyzed. The utilization ratio of energy of this type of hammer is got. It is shown that the efficiency of electro-hydraulic hammer is 7 times as much as that of steam drived hammer.