An investigation of the use of KrF pulsed excimer laser surface machining of X-cut lithium niobate is presented. Trenches of 20μm width were formed using a wide range of laser fluences and number of pulses. These trenches were analysed in terms of ablation rate, ablation depth and in particular, laser-induced surface damage. Different forms of observed surface damage have been analysed using SEM imaging and categorised. Possible mechanisms for the damage types are proposed. The effect of depositing a silicon dioxide overlayer on the sample prior to ablation is examined resulting in significant improvement in the quality of the ablated patterns with minimal reduction of ablation rate.