Micro-machining of advanced engineering materials such as stainless steels, titanium alloys, nickel alloys, and ceramics is a challenging task due to properties like high strength to weight ratio, toughness, slenderness ratio, and low thermal conductivity. Stainless steel of grade AISI 316 has wide applications in medical science, automobile engineering, aviation, and aerospace industry due to their favourable material properties such as low thermal conductivity, high corrosion resistance, and high strength to weight ratio. Micro-machining of AISI 316 with high aspect ratio is a difficult task due to excessive heat generation, micro-structural changes, and tool breakage. Laser beam machining (LBM) process is a suitable alternative machining process, since it localizes the heat source to control the micro-structural changes. The difficulty arises during laser drilling because of spatter area and heat affected zone (HAZ), which adversely affects the quality of laser drilled holes. The present study attempts to experimentally investigate the effect of laser process parameters such as pulse width, laser energy, pulse frequency, and flushing pressure on the performance measures such as spatter deposition and heat affected zone (HAZ) during drilling operation. To reduce the total number of experimental run and obtain maximum information for the experimental trials, Taguchi L27 has been adopted. Analysis of variance (ANOVA) is performed to identify significant laser parameters influencing both the performance measures. From the study, it is revealed that pulse width is the most significant parameter in the formation of spatter and HAZ. From the results, it is identified that spatter area initially increases with increase in pulse frequency and then decreases for any level of pulse width. As pulse frequency increases, laser power increases resulting in more heat input into the material. This causes increase in vapour pressure inside the laser drilled hole, more material ejection, and increase in spatter area. However, laser supported absorption (LSA) waves developed at higher value of pulse frequency brings about blockage of laser energy from the material surface as an engrossing plasma, which results in reduction of material ejection and reduction in spatter area. It is observed that HAZ increases with increase in pulse width and pulse frequency. It may be due to higher average power of the laser beam, which is directly proportional to pulse width and pulse frequency. Higher the value of pulse width, higher will be the laser thermal energy and higher HAZ.