By nanosecond, 532-nm laser irradiation typically at similar to 1 J/(cm(2) pulse), water-suspended thin gold flakes, 0.1-0.2-mu m thick but more than 10-mu m across, were efficiently fragmented in a unique two-step mode, as evidenced by the in situ extinction spectra taken as a function of the laser irradiation time. The initial main photoproducts were spherical gold particles in the submicrometer regime. Their ensuing laser fragmentation in oxygen-free water environment generated stable, negatively charged, fine nanoparticles less than 10 nm in diameter, characterized by a considerably weak and blue-shifted plasmon band. The Mie theory can reproduce these distinct spectral features of the fine nanoparticles as well as the scattering-dominated extinction spectra of the submicroparticles. The submicroparticle to nanoparticle conversion seemed most likely to be a single-pulse event, not leaving any larger intermediate nanoparticles in the suspension. Oxygen, as an effective electron acceptor, strongly affected the stability of the negatively charged nanoparticles, promoting their quasireversible or irreversible agglomeration. From the estimated balance between the absorbed laser energy and the energies for the relevant particles to produce a high-temperature molten state, possible fragmentation mechanisms are discussed.