An experimental investigation of the cutting performance in hybrid laser–waterjet (or laser-assisted waterjet) micro-grooving of germanium wafers is presented, with a view to eliminate or minimize the laser-induced thermal damages to the workpiece. Various process parameters are considered, such as water pressure, laser pulse overlap, pulse energy and focal plane position. It is found that the hybrid laser–waterjet is a viable technology for micromachining of germanium with negligible thermal damage. A Raman spectroscopy study did not reveal any crystalline change in the material on the machined surfaces. The effects of process parameters on the heat-affected zone and groove characteristics are amply discussed. It is shown that good grooves of within 100 µm in top width and up to 300 µm in depth can be machined with high material removal rates, and the heat-affected zone size can be controlled to within 20 µm on each side of the grooves. Recommendations are also made on the appropriate process parameters that may be used in the process.