A chemically assisted ion beam etching system has been used to etch InP in a chlorine environment and to investigate the etching mechanisms. This paper particularly presents unusual features observed after etching InP with high chlorine concentration and relatively low temperature. They are the first direct observation of indium chloride clusters and their coalescence behavior. Various types of roughnesses and etching profiles are described for different conditions (Cl-2 pressure and ion beam properties). The results point out the importance of the substrate temperature during etching.