The etch characteristics of Ni thin films masked with a photoresist were investigated using inductively coupled plasma reactive ion etching in a Cl2/Ar gas mix. As the Cl2 concentration increased, the etch rate of Ni films decreased and the redeposited materials around the etched films were reduced. These results indicate that the etching of Ni films obeys mainly a physical mechanism. The reduction of redeposited materials with increasing Cl2 concentration implies the involvement of chemical reaction in the etching of Ni thin films. The degree of etch anisotropy was improved with increasing coil rf power and dc-bias voltage. Slight improvement in the etch profile was observed at low gas pressure. An x-ray photoelectron spectroscopy analysis confirmed the formation of NiCl2 compound on the etched surface. Therefore, it can be concluded that the etching of Ni films is governed by physical sputtering along with the assistance of chemical reaction.