In this paper, the interaction of Q-switched Y AG: Nd 3+ laser radiation of moderate intensity (up to 50–100 MW cm− 2) with an aqueous suspension of submicron light-absorbing particles is investigated. The experiments reveal significant self-induced attenuation of laser radiation which is accompanied by laser-induced incandescence of suspended particles. The transformation of shape is also observed for the laser pulses propagating through the suspension and for the scattered pulses. A model is proposed which describes the experimental data obtained. The model supposes that gaseous shells grow around the laser-heated particles due to the vaporization of surrounding water. With the use of the proposed model, calculations were performed for the optical transmittance of the cell and for the shape of the transmitted and scattered laser pulses. The calculated and experimental data are in satisfactory agreement with each other. It is also concluded that only a small fraction (approximately 0.01–0.5%) of the laser-heated particle energy is spent in evaporation of the surrounding water.