Inconel 718 offers high oxidation resistance, mechanical strength, and heat resistance, which enables turbofan engines to maintain excellent performance in an operating environment of 1000°C. These properties make Inconel 718 difficult to machine by conventional machining techniques. Water jet guided laser (WJGL) is a composite processing technology that combines water cooling and laser processing technology. Therefore, it is advantageous and promising in processing Inconel 718. However, the water layer on the substrate surface in processing limits WJGL 's ability to ablate the metal, which leads to burrs formed when manufacturing groove structures. Therefore, a new method for manufacturing groove structure on Inconel 718 by Annular gas-assisted water jet guided laser (AGAWJGL) is proposed in this paper. This method reduces burrs and improves material removal efficiency by removing the water layer from the substrate surface with the gas-assisted. Then, groove processing experiment are performed on Inconel 718 alloy sheets with thickness of 1 mm. The experimental results show that the average size of burrs reduces 36%, and the depth of grooves increases 13%. These provide the theoretical foundation for the WJGL machining of Inconel 718.