Design and operation of a cw, transverse‐flow oxygen‐iodine chemical laser are reported. Reactant recirculation in the O2(1&Dgr;) chemical generator allows long duration (up to 2 h) operation. Peak powers of 460 W, and stable outputs of 80 W have been demonstrated. Power extraction efficiencies of up to 65% were measured for 80‐W operation, and the implications of this observation for theI2dissociation mechanism are discussed.