Internal motion and dynamics mechanism studies of a new composite percussion drilling tool aim at reducing stick-slip phenomenon and improving rock breaking efficiency. In this study, experiments are performed using composite percussion drilling tools to investigate its torsional and axial composite impact performance. According to the experimental results, a six degrees-of-freedom (6DOF) rigid body motion model was established to study the passive motion of a torsional hammer. The obtained results, including the tangential acceleration, were verified with experimental data, and the small pressure differences between the high and low pressure areas, which mainly determined by the inlet structure, is the main reason for the poor torsional impact effects. Based on these discoveries, the improved design increases the inlet flow to 17.2% of the total, the pressure differences to 0.05 MPa, and the instantaneous tangential acceleration to 0.198 m/s2, which results in increased tangential acceleration fluctuation amplitude by 1137.5% and greatly improved torsional impact performance. This research can provide a baseline for stick-slip reduction technology optimization.