Laser spectroscopic measurements are an effective method for the on-line investigation of formation processes of harmful substances during laser treatment of tissue in medicine. Specific radicals like CO, CO2, CN, OH, CN, CH2, C2, NH, SH, CS produced during laser application for cutting and evaporation of tissue characterize the kind of laser tissue interaction. The molecule fragments in the ground or excited states have been detected in dependence on the applied medical laser system by spontaneous or laser induced fluorescence. The chemical reaction processes in the laser tissue interaction zone can be changed significantly by the surrounding gas atmosphere. An increasing oxygen content in the surrounding atmosphere reduces the amount of harmful substances in the laser plume. The laser spectroscopic investigation inside the reaction zone reflects clearly the interplay of complete and incomplete oxidation in dependence on different gas atmospheres in the reaction zone. The application of pure oxygen and oxygen enriched gases is limited in laser medicine because of safety regulating. Therefore water was used as an oxygen donor. The water was added into the laser tissue interaction zone using a water aerosol spray. The oxygen was released during the laser treatment with the result of the water dissociation under the high temperature conditions. The production of toxic and carcinogenic substances was reduced significantly by this method. The cutting efficiency in the case of water spray application is unchanged in comparison to the treatment without water spray but the quality can be improved, as histological investigations demonstrate.