Poor surface quality and rapid tool wear are the main problems in micro-cutting of Inconel 718. In this study, a novel hybrid machining method named laser-induced oxidation assisted micro-milling is proposed to solve the aforementioned problems. A loose oxide layer and a relatively flat sublayer are formed on the material after laser irradiation. Under optimized laser parameters with a scanning speed of 1 mm/s and an average laser power of 4.5 W, the thicknesses of the oxide layer and the sublayer are 24 and 18 μm, respectively. The influence of cutting parameters on milling force, surface roughness, surface quality, and top burr size is studied in detail. Cutting force and thrust force in the proposed hybrid machining process are lower than those in the conventional micro-milling. Results show that for the investigated range of parameters, the optimal feed per tooth and depth of cut in the hybrid process are 3 μm/z and 3 μm, respectively. When using the optimal parameters, the surface roughness of the machined slot bottom is 108.5 nm. The top burr size on the up-milling side and the down-milling side is 26.8 and 36.2 μm, respectively. In addition, the tool wear mechanism is coating delamination in hybrid process, whereas chipping, coating delamination, tool nose breakage, and adhesion are the main tool wear mechanism in the conventional micro-milling. For the same amount of material removal, the proposed hybrid process can decrease the tool wear and enhance the service life of the micro-end mill as compared to conventional micro-milling.