Laser annealing has been employed to decompose half-metallic CrO2 into insulating Cr2O3 in air ambient. While both Cr2O3 and CrO2 are present, the relative fraction of each phase was controlled by changing the duration and power of laser irradiation. Glancing angle x-ray diffraction and micro-Raman scattering were used to characterize samples before and after laser annealing. The laser-induced decomposition of CrO2 into Cr2O3 that leads to a threefold enhancement of the low-field magnetoresistance and the realization of phase control of the CrO2/Cr2O3 system in selective microregions by laser irradiation implies: (i) optical lithography can be used as a potential method to directly control the magnetotransport properties which are strongly depended on the interface tunneling barrier and (ii) The CrO2 polycrytalline phase could be much more attractive as a high-density magnetic storage medium. © 2003 American Institute of Physics.