Laser assisted etching of AlGaAs and GaAs by chlorine using ArF and KrF excimer lasers was investigated. The etching rate of AlGaAs was shown to be larger than that of GaAs. Quadrupole mass spectroscopy analysis of the etching products for KrF assisted etching showed intense Ga-l and As+ signals from AlGaAs. It is suggested that a laser-induced neutral atom desorption process is enhanced in the AlGaAs etching. Hall measurements of a shallow channel heterostructure sample and GaAs Schottky diode characterization demonstrated the low damage of the etching process. The etching profile was examined by scanning electron microscopy and feasibility for field effect transistor gate recess etching was shown.