In this work, to investigate improvement of the damage using oxygen containing plasma, we etched PZT films as a function of Ar (x%)/O-2 (y%) gas mixing ratio in Cl-2 (56%)/CF4 (14%) plasma (where the sum of x and y is 30). The maximum etch rate of the PZT thin films was 146 nm/min for Ar (30%)/O-2 (0%) added into the Cl-2/CF4 plasma. After the etching, the plasma-induced damages were characterized in terms of hysteresis curves, leakage current, switching polarization and retention capacity as a function of the gas mixing ratio. When the ferroelectric properties of PZT films were etched as a function of O-2 and Ar and the gas mixing ratios were compared, the value of remnant polarization in O-2 (30%) added Cl-2/CF4 plasma is higher than that in Ar (30%). The results showed that after the etching the charges accumulated by oxygen vacancies prevented further domain switching at the top electrode-ferroelectric interface and created leakage current because of modification of the interfacial Schottky barrier during the etching process. The physical damage to the near surface and the crystal structure of the etched PZT thin films was evaluated by using X-ray diffraction (XRD). The remnant polarization, leakage current, retention and fatigue properties are improved with increasing O-2 content. From XRD results, the improvement in the ferroelectric properties of PZT capacitors etched in O-2 containing plasma was consistent with the increased intensities of the (100) and (200) peaks. (C) 2003 Elsevier B.V. All rights reserved.