The invention relates to filter paper for a cooling system in wire electrical discharge machining (WEDM), which comprises the following components in percent by weight: 18-25 percent of phenolic resin, 0.5-5 percent of glass fiber, 0.5-5 percent of polyester fiber and 65-82 percent of wood pulp fiber. A production method of the filter paper comprises the steps of pulping, pulp mixing, paper making, drying, glue setting and forming. The filter paper adopts the wood pulp fiber as the main material which is matched with a proportion of glass fiber and polyester fiber, so that the bore diameter of the filter paper can be reduced, and the filtering accuracy can be improved; and in addition, since the polyester is chemically-synthesized fiber and has high strength, the bursting strength of the filter paper is improved, and the service life of the filter paper is prolonged. In the production process of the filter paper, thermosetting phenolic resin is introduced by dipping setting glue, and the size stability, the high temperature resistance and the water resistance of the filter paper are further improved. When being applied to a cooling liquid circulating system in WEDM, the filter paper is not deformed or expanded and has good strength in water, and the phenomena of water jetting and black water generating due to bursting are avoided.