Pulsed laser ablation of mold compounds for IC packaging in air and with steam assistance is investigated. It is applied to decap IC packages and expose computer CPU dies for the device failure analyses. Compared with chemical decapping, the laser ablation has advantages of being fast speed, non- contact and dry processing. Laser ablation with the steam assistance results in higher ablation rate and wider ablated crater with much smoother surface morphology. It implies that the steam assisted laser ablation can achieve a faster and better quality laser processing. Audible acoustic wave and plasma optical signal diagnostics are also carried out to have a better understanding of the mechanisms behind. Light wavelength and laser fluence applied in the decapping are two important parameters. The 532 nm Nd:YAG laser decapping at a low laser fluence can achieve a large decapping area with a fine ablation profile. IC packages decapped by the laser ablation show good quality for the device failure analyses.