The hole quality on sheet metal parts is directly dependent on the die design and process parameters. In conventional piercing process, the secondary operations such as shaving, reaming and grinding are needed for manufacturing the precise-dimensioned holed parts without any cracks, resulting in the increase of both production time and costs. The fine-piercing process, referenced to the fine-blanking principle, is used to produce the precise-dimensioned holed parts with smooth-cut surfaces over the whole material thickness in a single operation. However, it is difficult to achieve the suitable die design and process parameters for meeting the part requirements. In this study, the die design by chamfering punch cutting edge was investigated on both the experiments and the finite-element method (FEM). The results were compared with the results obtained when the conventional die design with the punch cutting-edge radius was used. The FEM-simulation results showed the amount of die-roll, smooth-cut surface, and cracks agreed well with the experimental results. The results showed that an application of punch cutting-edge chamfer results in a superior fine-pierced hole surface could be achieved. Furthermore, the mechanism and effects of the punch cutting-edge chamfer have been theoretically clarified on basis of the material-flow analysis and stress distribution.