Water-guided laser processing technology can be used for precision machining of refractory materials such as superalloy and composite materials. Compared with traditional short-pulse laser processing, it has the advantages of less thermal damage, smaller taper and greater depth, cleaner surface and so on. However, the existing technologies have two key problems of low laser coupling power and poor process reliability, which seriously affect laser processing efficiency and workpiece processing quality. Based on this situation, a water-gas shrinkage-guided high-power laser processing (WSLP) technology is proposed innovatively in this paper. Firstly, the laminar shrinkage mechanism is analyzed. secondly, the characteristics of water-gas contraction and total reflection conducting laser are investigated by simulation. The results show that water-gas compressibility effect can make water-jet compressed to within 0.1mm; and some systematic disturbance does not affect the laser coupling efficiency because of the total reflection effect at the water-gas interface, which verifies the stability and reliability of the system. In addition, water-gas shrinkage coupling experiment and total reflection conducting laser experiment are completed. The experiment result shows that the laser coupling efficiency can reach up to 93%; The feasibility of the system processing is verified by the tests.