High-efficiency, high laser-damage threshold reflection gratings can be made by etching a grating structure into the top layer of a multilayer high-reflectivity stack. Spatial efficiency and wave-front uniformity can be maximized by taking advantage of the etch-stop properties of the layer underneath the top layer to be etched. The etch-stop layer must have a high optical damage resistance, which places severe restrictions on available materials. The etch characteristics of HfO2 and Sc2O3, two materials commonly used in high laser-damage optical coatings, have been evaluated. The etch rate selectivities of e-beam evaporated SiO2/HfO2/Sc2O3 thin films in a reactive ion etching system optimized for SiO2 etching are approximately 100/10/1. Gratings etched to a HfO2 etch-stop layer suffered from deposition of fluorinated Kf compounds on the SiO2 grating sidewalls, but sidewalls were clean when Sc2O3 was used as the etch-stop layer.