Substitution of neon for argon as the diluent gas in electron‐beam‐pumped XeF lasers allows increased optical extraction energies of 2.8 J l−1and efficiencies of 1.8%. The improved performance in neon diluent is due to a reduction of the optical absorption in the laser medium which occurs at the laser wavelength. This optical absorption is shown to be present when the rare gases along are irradiated.