Pulsed Nd:YAG laser was used for efficient drilling of cylindrical hole patterns in porous Ni–YSZ cermet plates. Green NiO–YSZ oxide ceramic substrates obtained via tape casting technique were machined using 8–80 ns pulses at the fixed wavelength of 1064 nm. The etched volume, drill diameter, shape and depth were evaluated as a function of the processing parameters such as pulse irradiance and pulse number. The laser machining mechanism was discussed by means of laser–material interaction parameters such as beam absorptivity and plasma formation and the impact to the overall process discussed. Holes with uniform diameter from 30 to 110 μm and up to 1 mm depth were drilled with a high efficiency of up to 0.1 mm3 per pulse. Green state machining showed significant efficiency whereas the properties of the cermet substrate were kept unchanged.