Chip-scale lithium niobate (LN) yields a competitive candidate for terahertz (THz) on-chip communications, which could enable high-rate data transmission, non-invasive biosensing, and cloud-based technologies. However, it remains a key challenge to reach such goals to fabricate functional millimeter-scale crack-free THz microstructures on chip-scale LN, especially for industrial use. Here, we propose a one-step crack-free microstructure fabrication approach using dispersion-engineered femtosecond laser pulses without involving any postprocessing method. By laser dispersion engineering, the fabricated one-dimensional photonic crystal can improve the THz transmittance by about 5.8 times compared to the general case. This achievement is based on a thorough investigation into the influence of femtosecond laser temporal dispersion on the lithium niobite machining process. Our findings may further promote the development and industrial applications of LN-based photonics and optoelectronics, especially for chip-scale THz devices, as well as offer insights into the realization of precision machining of other forms of hard and brittle materials.