The detailed processes of laser-assisted chemical etching are studied by using an optical in situ monitoring method. Various Al thin-film specimens are processed in aqueous H3PO4 solutions by shining focused Ar+ laser beams. As etching progresses, it is observed in the back reflected laser beam that a concentric circular fringe pattern appears and shrinks. The development of the etching process is explained by analyzing the diffraction patterns with an etched shape function of a Gaussian nature.