A laser system for inscribing permanent identification markings on or below the surface of a diamond. A shallow penetration depth and narrow line width is achieved by using a harmonic conversion device to produce an output frequency which is the second harmonic of the fundamental laser frequency in combination with a lens system having a short focal length to provide a high density pinpoint spot of laser energy. The energy intensity can be further regulated by a polarization attenuator. In operation, the diamond is mounted on a movable support structure which insures proper relationship to the laser beam. The process is activated by a computer which supplies positional commands to the movable support and is interfaced with the laser for generating programmed alpha-numeric sequences.