Laser-assisted dry etching ablation (LADEA) has been reviewed with an emphasis on its applicability for the microstructuring of III-V semiconductor compounds. The method is based on the application of an excimer laser ( λ= 308 nm) for pulsed heating of a wafer which is placed in a stream of Cl2/He gas. Both the products of chemical reaction and the depth to which a laser-induced reaction takes place depend on laser fluence. This makes possible the ablation of a well defined volume of the material. Little or no structural damage to the surface is observed because ablation is carried out with laser fluences below those required to melt the matrix material. The laser fluence dependence of the etch rate indicates that the process is primarily temperature driven with a characteristic energy for desorption. We have investigated LADEA as a method for in-situ processing of III-V semiconductors and the fabrication of nanostructures. An atomic force microscopy study has shown that atomically smooth surfaces can be obtained if the etch rate is near 1/2 atomic layer per laser pulse. The lateral resolution of LADEA has been found to be at least 20 nm. This, as well as the results of in-situ photoluminescence and Auger electron spectroscopy measurements, indicate that LADEA can be used for the direct (photoresist-free) fabrication of high quality microstructures and, ultimately, for the nanostructuring of III-V semiconductor compounds.