Laser cutting of small diameter holes in alumina tiles is carried out. Temperature and stress fields are predicted numerically using the ABAQUS finite element code. The cut sections are examined by incorporating scanning electron microscope and optical microscope. The residual stress developed in the cutting section is determined using the X-ray diffraction technique. It is found that high residual stresses are formed in the cutting section, and predictions agree well with the experimental results. The laser cut edges are found to be free from the large cracks. However, interconnected shallow cracks are observed at the hole cut surface.