Multilayer dielectric grating (MDG) is one of the key optical elements of high-power laser systems. To meet the need of MDGs for high-power laser systems, experimental investigation on MDG with a top layer of HfO2 has been carried out using Kaufman-type ion beam etcher. The optimal ion source conditions have been obtained by etching of HfO2 in pure Ar and Ar/CHF3 mixture plasmas. Compared with pure Ar plasma etching, better selectivity was achieved with Ar/CHF3. The redeposition of sidewalls effects are quite obvious during etching, which results in the increase in duty cycle of etched grating. As there is a distribution of etch rate along the direction normal to the scan movement, a special-shaped mask was made to be used as a substrate holder, which increases uniformity of the etched profile. In order to process repeatability, the ion source should be cleaned up, the cathode and neutralizer filament should be changed after etching process to full completion. Based on the above techniques, a number of MDGs have been achieved, each of which has a mean diffraction efficiency greater than 95%, a line density 1480 lines/mm, and on aperture up to 80 mm×150 mm. Experimental results agree fairly well with the designed, which provides a good reference for the large aperture MDGs ion beam etching.