YBCO Step edge Josephson junctions are fabricated on single crystal MgO (100) substrates, and the effect of Ar+ ion irradiation on the critical current (Ic) and normal state resistance (Rn) is studied. It is shown that on the appropriate exposure of the YBCO step edge junction to Ar+ ion irradiation, the IcRn product of the junction can be enhanced up to 0.66 mV at 77 K, which is sufficiently good for many applications. With the increase in the exposure time of Ar+ ion irradiation, the value of Ic decreases, and the Rn value increases. After irradiating for 4 min, Ic as low as 70 μA and Rn as high as ∼9.4 Ω have been obtained at 77 K. It is found that for higher exposure time, the junction behavior tends to SIS-type junctions. The mechanism responsible for the decrease in Ic and increase in Rn seems to be associated with the vacancies as well as displacement of oxygen atoms caused by the ion irradiation, which causes the suppression of superconducting parameters as the superconducting properties critically depend on the concentration of the oxygen atoms in the Cu-O planes.