Photochemical machining is a non-traditional machining process that can be applied to most metallic and several non-metallic substances and due to elimination of mechanical stresses, the produced surfaces are burr-free and rough down to a few nanometers without any excessive polishing process. The most important step of this technique is optically applying desired pattern on photoresist which is called lithography. Lithography process is employed to cover selected areas with a photosensitive polymer and let the uncovered areas to be removed or processed in subsequent steps. Lithography as the most important and challenging step is done in several ways which are divided into two major types, mask-based and maskless. Conventional lithography (mask-based) uses light that shines through the entire surface of a mask at once. It requires exorbitant and massive optical and precision setting elements, besides the complexity of designing a photomask. Maskless lithography is done through incremental exposure of a substrate without using any masks. Its primary use is in rapid prototyping, small scale manufacturing, non-planar lithography and fabrication of photomask for mask-based lithography. Maskless laser lithography is one of the numerous maskless systems that have been developed in recent years through rapid development of solid state and semiconductor lasers with shorter wavelengths that are highly affordable and energy efficient. In maskless laser lithography, exposure time would be less than a micro-second using a focused high power laser beam. Covering the whole workpiece surface by moving laser on workpiece or vice versa, completes the exposure process. Maskless laser lithography is capable of reaching feature sizes down to few hundreds of nanometers. Moreover, maskless laser lithography is well suited for lithography on non-planar surfaces. In current research, the development and manufacturing of a maskless laser lithography system is introduced. The system uses components that are commercially available and highly affordable for such a system in comparison to other available lithography systems. The system uses a semiconductor laser extracted from a blu-ray burner drive. The optical components were also were readily available from the drive. This laser is driven by a iC-NZN laser driver board in current control mode. The laser and the stage that holds the workpiece are moved using two stepper motors that rotate a screw to give precise movement speed. A driver has been designed for steppers that can supply voltages down to five volts with a soft micro-stepping function. The whole system is controlled using an FPGA board that is programmed with Verilog language. This system was utilized to produce some micro-channels as a useful product and to evaluate system parameters. The minimum channel width that could be reached using this system and the commercially available Positive-20 photoresist was about five micrometers. Finally the system parameters and output are analyzed. In order to do that, mixed factorial design of experiment is used. The results were analyzed using ANOVA to find main effects and interactions of laser power, scanning speed and photoresist thickness on micro-channel width. Moreover, those parameters were used to find the best regression model to find a formula that connects those parameters with micro-channel width. Keywords: photochemical machining, laser, maskless, micro-channel