Due to limited success in wet etching of GaN and AIN, dry etching techniques have become more relevant for the processing of the GaN films. Here we demonstrate the results of an alternative dry etching process, namely, pulsed laser etching, for GaN and AIN. In this method, a KrF pulsed excimer laser (λ=248 nm, τ=30 ns) was used to etch epitaxial GaN and AIN films. The dependence of the etching characteristics on the laser energy density and the number of pulses has been studied. The etch depth showed a linear dependence on the number of pulses over a wide range of laser energy densities. The threshold intensity for GaN etching was determined to be 0.33 J/cm2. The etching rate was found to be a strong function of laser energy density. Above the threshold, the etch rate was found to be 300–1400 Å per pulse leading to etching rates of 0.1–1μm/sec depending upon the laser energy density and the pulse repetition rate. It is shown that the etching mechanism is based on laser induced absorption, decomposition and layer by layer removal of the GaN.