Over the last few decades, miniaturization has become the key aspect of driving evolution of modern technology. The CO2 laser is an inexpensive, flexible, and fast device for fabricating microfluidic chips. Thermal damages associated with such a process are considered the big challenge for microfluidic device developers. This article evaluates the quality of polymethyl methacrylate microchannels fabricated by the CO2 laser. Experiments were conducted in the air (dry) and underwater by leaving a thin water layer on the top surface of the polymethyl methacrylate substrate. The effect of laser power and scanning speed on performance characteristics, such as the microchannel aspect ratio, surface roughness, and heat-affected zone was studied. Taguchi’s experimental design with grey relational analysis was used for multi-objective optimization of the laser micromachining parameters.