A three-dimensional, unsteady heat transfer model has been developed for predicting the temperature field in partially-stabilized zirconia (PSZ) undergoing laser-assisted machining. The semi-transparent PSZ is treated as optically thick within a spectral band from approximately 0.5 to 8 μ m. After comparing the diffusion approximation and the discrete ordinates method for predicting internal radiative transfer, suitability of the diffusion approximation is established from a comparison of model predictions with surface temperature measurements. The temperature predictions are in good agreement with measured values during machining. Parametric calculations reveal that laser power and feedrate have the greatest effect on machining temperatures. © 2005 Elsevier Ltd. All rights reserved.