Dry etching of CoTb and CoZrNb magnetic thin films was studied using a hard mask in an inductively coupled plasma. A Cl2/O2/Ar gas mixture was selected as an etch gas and various hard masks, such as SiO2, Ta and TiN, were employed. The TiN hard mask showed the highest etch selectivity to magnetic films among the three hard masks. As the O2 concentration in a Cl2/O2/Ar gas mix increases, the etch profiles of magnetic films improved because of due to the increased etch selectivity. From Auger electron spectroscopy (AES) analysis of the etched magnetic films, no redeposited materials on the sidewall of the etched films were observed. From the etch characteristics and AES analysis, we propose that the etching of CoTb and CoZrNb films proceeded mainly by means of chemically assisted physical sputtering.