A dry-etching process that produces very smooth facets in the AlGaAs/GaAs material system is described. Chemically assisted ion beam etching (CAIBE) is used to fabricate the facets, with SiO2 as the etch-mask. Reactive ion etching (RIE) is used to transfer the resist pattern to the underlying SiO2 layer. RIE operating conditions, including gas type, power density, and etching pressure were characterized to achieve smooth SiO2 sidewalls. It is found that CF4 etching at low power density of 0.10 W/cm(2) and low pressure of 1 mTorr produces very smooth SiO2 sidewalls. As a result, excellent etched facets are obtained by CAIBE, using SiO2 as the etch-mask. This dry-etching process is being used to fabricate waveguide diode ring lasers. A self-aligned etching process, which defines both the ridge and the facets for the ring lasers in the same lithography step, is also discussed.