Laser scribing effectively reduces the energy loss of grain-oriented silicon steel in alternating and pulsating magnetic fields. This study focuses on the 27Q120 material, analyzes the macroscopic surface morphology and iron loss variations of grain-oriented silicon steel under the influence of two types of laser spots (circular spots without the application of a diffractive optical element (DOE) and rectangular spots formed by a DOE), laser power (600W to 2400W), and scribing spacing (3.5mm to 7.5mm) as process parameters. The relationship between magnetic domain width, stress, and iron loss was analyzed. The result shows that the iron loss improvement rates (β) achieved with circular and rectangular spot scribing were 16.054% and 17.116%, respectively. Corresponding magnetic domain widths were 0.17754 mm and 0.1636 mm, with hysteresis losses of 0.5114 W/kg and 0.5033 W/kg, respectively. Under the same laser power and scribing spacing, a lower energy density significantly reduced the damage to the surface macroscopic morphology by the laser, leading to improved iron loss. Furthermore, the iron loss of grain-oriented steel is positively correlated with the width of magnetic domains and negatively correlated with compressive stress.