Refractive index gratings have been inscribed in polymer thin films by permanently photobleaching the organic chromophore PYR-3 dopant. The grating inscription process was investigated in detail for the purpose of improving the diffraction efficiency (η) of the PYR-3 doped polymer gratings. Three processes were identified that contributed to the η of the first diffracted order: a periodic change in the refractive index due to photobleaching of the PYR-3, formation of the surface relief grating as a consequence of free volume change during bleaching, and the introduction of periodic, strain-induced changes in the refractive index.