One of the key processing concerns in the integration of thin film capacitors into the existing VLSI for ferroelectric or dynamic random access memory applications is the patterning of these films and the electrodes. In this work, we have identified a suitable etch gas for dry etching of PZT thin films on electrodes. The etch rate and anisotropy have been studied as a function of etching conditions. The trends in the effect on the etch rate of the gas pressure, RF power and additions to the etch gas have been determined and an etching mechanism has been proposed. It was found that ion bombardment effects are primarily responsible for the etching of both PZT and thin films. Etch rates of the order of 20–30 nm/min were obtained for PZT thin films under low gas pressure and high RF power conditions. The etch residues and the relative etch rates of the components of the PZT solid solution were determined using XPS. The results show that the etching of is the limiting factor in the etch process.