Dry etching‐induced damage is investigated using radical‐beam ion‐beam etching. This technique allows the systematic study of process‐induced damage over a wide range of etching rates and with varying components of physical and chemical etching. Induced damage is characterized byI‐Vmeasurements from Schottky diodes on etched surfaces and from luminescence from quantum wells situated in close proximity to etched surfaces. We have designed a novel multiple‐quantum‐well probe structure that also includes a 4000 Å‐thick quarter‐wavelength mirror stack layer to allowinsitumonitoring of etch rate and etched depth. Our work examines damage as a function of ion beam voltage and beam current density, microwave power, and with and without a reactive gas. We have found that damage increases with increased ion energy and decreases with etch yield.