The characteristics of ethanol-air microscale laminar-flow diffusion combustion were investigated. Combined with experimental study and numerical simulation, the effects of surface heat loss on the flame stability in the confined space were systematically analyzed. The surface heat loss was controlled by electrical heating inside. According to the results, the electrical heating reduced the effects of heat loss and enhanced the stability effectively. Using the appropriate electrical heating power, it reached the widest stability limits of combustion. The flame feature size and temperature distribution were both changed by the electrical heating. The electrical heating raised the flame temperature. The chemical reaction rate became bigger, and the micro-flame shifed upstream. Within a certain range, the electrical heating increase was greater than the increase of the heat loss. The electrical heating inhibited the heat loss and enhanced the stability.