Reactive‐ion etching (RIE) and chemically assisted ion‐beam etching are routinely used in the fabrication of submicrometer features. Both techniques are known to produce electrical damage. We have used a combination of Raman spectroscopy and photoreflectance to study the effects of dry etching on the depletion layer width and built‐in electric field of heavily doped GaAs. We find that RIE reduces the built‐in electric field and at the same time increases the depletion layer width. These results can be understood in terms of the formation of a more insulating layer near the surface. Our analysis shows that even though the Fermi‐level pinning position can change, the predominant effect of dry etching is to change the carrier density of the near‐surface region. We also observe that the use of chlorine‐based species in the etch reduces the electrical damage.