Conventional mechanical machining of a composite material comprising an aluminum matrix reinforced with a high volume fraction of SiC particles (hereinafter referred to as an SiCp/Al composite) faces problems such as rapid tool wear, high specific cutting force, and poor surface integrity. Instead, a promising method for solving these problems is laser-induced oxidation-assisted milling (LOAM): under laser irradiation, the local workpiece material reacts with oxygen, thus forming loose and porous oxides that are easily removed. In the present work, the oxidation mechanism of SiCp/Al irradiated by a nanosecond pulsed laser is studied to better understand the laser-induced oxidation behavior and control the characteristics of the oxides, with laser irradiation experiments performed on a 65% SiCp/Al composite with various laser parameters and auxiliary gases (oxygen, nitrogen, and argon). With increasing laser pulse energy density, both the ablated groove depth and the width of the heat-affected zone increase. When oxygen is used as the auxiliary gas, an oxide layer composed of SiO2 and Al2O3 forms, and CO2 is produced and escapes from the material, thereby forming pores in the oxides. However, when nitrogen or argon is used as the auxiliary gas, a recast layer is produced that is relatively difficult to remove. Under laser irradiation, the sputtered material reacts with oxygen to form oxides on both sides of the ablated groove, and as the laser scanning path advances, the produced oxides accumulate to form an oxide layer. LOAM and conventional milling are compared using the same milling parameters, and LOAM is found to be better for reduced milling force and tool wear and improved machined surface quality.