Oxygen plasma etching of thermosetting polyurethane electro-optic polymers containing disperse red 19 side groups was characterized in detail for making low loss optical waveguides and modulators. The effect of varying parameters such as the RF power, oxygen pressure, and flow rate on optical loss, etching rate, and etching selectivity to photoresist etch mask was studied. These parameters were optimized to minimize the surface roughness in etched areas. By properly choosing the etching conditions, scattering loss due to the surface roughness can be reduced from 0.9 dB/cm to less than 0.1 dB/cm at the wavelength of 1.3 mu m, which is much smaller than the absorption loss of the polymer.