Abstract: A method of fabricating a multilayer dielectric (MLD) diffraction grating by providing a multilayer stack having a grating layer, and anisotropically etching the grating layer to form grating lines having an initial lineheight, an initial linewidth, and an initial grating duty cycle, that are greater than a target lineheight, a target linewidth, and a target grating duty cycle, respectively. An isotropic wet etch solution is then used to etch back the grating lines to the target lineheight, the target linewidth, and the target grating duty cycle so as to minimize electric field intensities and maximize diffraction efficiency for a given set of MLD illumination conditions.