The micromachining technique for the fabrication of Fe-36%Ni (Invar®) microgrooves using a novel laser-induced wet etching system with an optical fiber as the light waveguide and machining tool is investigated. Microgrooves fabricated at the optimal process conditions with the proposed etching system have good surface morphology and dimensional accuracy. It is shown that the variation of etch profiles such as etch width and depth depends significantly upon the process parameters. Fiber damage, which is attributed to macrobubbles, can be dramatically reduced by adjusting the distance between the workpiece surface and the fiber terminal. The effects of process parameters such as laser power, scan speed, and threshold distance on etch width, depth, and crosssectional profiles are reported and the optimal process conditions to fabricate Invar® microgrooves with excellent shape and size are provided. Also, the applicability of the Invar® microgrooves for the manufacturing of shadow mask for an organic light emitting diode (OLED) is demonstrated.