The present study aims to understand droplet fragmentation due to instabilities from the radiative heating process. We focus on the plasma-induced breakup mechanism of iso-octane and n-hexane droplets from the nucleation of holes through sheets and instabilities. The plasma generation inside the droplets leads to an intense explosion followed by fragmentation of the droplets. A droplet is suspended in the air using an acoustic levitator and exposed to ultraviolet nanosecond laser pulses. The droplet sizes used are in the range of 0.5–2 mm in diameter, and laser energies are 10–20 mJ per pulse. Initially, plasma formation followed by shock wave emission is observed during the impact of the laser pulse. Afterward, the droplet opens at one side and is stretched vertically to form a liquid sheet. The hole formation and its rapid growth result in the breaking of the thin liquid sheet. Small droplets and ligaments emerge from the circular edge of the sheet, which follows the well-known ligament distribution. This study reveals the detailed analysis of expansion dynamics, evolution of single and multiple holes, and instabilities associated with the liquid sheet. The results observed are categorized into four different mechanisms: (1) plasma formation followed by shock wave propagation, (2) droplet deformation, (3) sheet breakup through nucleation of holes followed by rapid growth, and (4) complete atomization.