Abstract We have investigated the surface damage induced by visible laser in LiNbO3:Fe. The laser damage tracks (glide lines and microcracks) and microdomains are produced at +c side of the periphery of light-illuminated regions. These microdomains arise at laser damage tracks and at cylindrical grooves on the surface of sample. We also found that these damage defects in LN:Fe can be decorated by space-charges due to photovoltaic effect and they are directly observable between crossed polarizers. Role of the cavity field, the electrostatic repulsive force at the doma-in boundary and self-enhanced diffraction light induced by physical imperfection on laser-induced surface damage are discussed.