To study the effect of water-mist on laser processing of carbon fiber reinforced plastic (CFRP). A method was used to process CFRP with a water-mist assisted laser. Theoretical analysis and experimental verification were carried out by orthogonal experiment, multiple linear regression analysis, and optical instruments. The effect of water-mist on the laser processing of CFRP was obtained, and the process parameters were optimized. The results show that the spot diameter of the laser gradually decreases with the increase of nozzle height, nozzle angle, and the decrease in gas pressure. As the nozzle angle increases and the gas pressure decreases, the laser loss rate decreases gradually. The nozzle height has little effect on laser power. When the nozzle angle is 50°, the gas pressure is 0.2 MPa, and the nozzle height is 30 mm, a depth-width ratio up to 5.303 can be obtained, and the laser loss rate is 1.473%. The internal characteristics of the kerf can be predicted by establishing empirical formulas between the water-mist parameters and the machining quality. Finally, compared with the gas-assisted laser processing of CFRP, smaller cross-section heat-affected zone and larger groove depth can be obtained by the water-mist-assisted laser processing of CFRP. This study provides a reference for laser low-damage processing of CFRP.