A method for crack-free machining of deep cavity in alumina is demonstrated using a low-cost CO2 continuous wave (CW) laser. CO2 laser underwater machining has been found to result in reducing substrate defects such as recast layer, dross, cracking and heat damages that are typically found in machining in air. Finite Element (FE) modelling technique and Smooth Particle Hydrodynamic (SPH) modelling technique were employed to understand the effect of water on crack resistance and debris removal during underwater machining. Also the microstructures of machined region were demonstrated to reveal different heating and cooling processes during laser machining in water and in air. The experimental results indicated that the machined kerf width was strongly affected by the water layer thickness, whereas the kerf depth was controlled by both the laser pass number and water layer thickness. The optimal average machining rate was up to 2.95 mm(3)/min at a 60W laser power. (C) 2011 Elsevier Ltd. All rights reserved.