Transfer of continuous-relief micro-optical structures from resist into GaAs, by use of direct-write electron-beam lithography followed by dry etching in an inductively coupled plasma, is demonstrated. A BCl3/Ar chemistry has been found to give satisfactory results, N2 and Cl2 have been added to change the selectivity between GaAs and e-beam resist. The transfer process generates smooth etched structures. Distortion of the diffractive structures in the transfer process has been examined. Blazed gratings with a period of 10 micrometers have been optically evaluated using a 940 nm VCSEL. The diffraction efficiency was 67% in the first order with a theoretical value of 87%. Also, simulations of the optical performance for the transfered diffractive elements have been made using Fourier transform of the grating profile. For integrating the optical element with VCSELs there are several possible alternatives. We have fabricated the optical structure on the same substrate that is used for the VCSEL and characterization is presently under way. We also show our initial results on transfer of micro-optical structures from resist into diamond using dry etching.