The main objectives of this work are: (1) to explore and improve the hybrid CO2 laser/waterjet (LWJ) technique, developed by Iowa State University’s Laboratory for Lasers, MEMS and Nanotechnology, to machine thick polycrystalline cubic boron nitride (PCBN) tool blanks both in 1D and 2D with minimum energy consumption and good cut quality; (2) to examine the mechanism of crack separation in the cutting process, both experimentally and numerically to increase the consistency of laser performance and manufacturing feasibility. The LWJ process showed advantages over conventional methods such as wire-EDM and pulsed Nd:YAG laser. The wire-EDM is not applicable for electrically insulating solid form PCBN tools and the pulsed Nd:YAG laser suffers from poor cut quality and low cutting speed. In this work, a 4.8-mm-thick specimen in solid form was cut successfully, both in 1D and 2D using nitrogen as an assist gas. The cut quality and governing mechanism were studied by electrical microscopy (SEM/EDS), Raman spectroscopy and optical profilometer. Statistical design of experiment was applied to help design and optimize the consistency of the cutting experiment. Numerical model based upon finite element analysis was also used to validate the mechanism and predict the surface profiles and fracture behavior. There are good agreement between experimental measurements and modeling results.