Dry etching is an area that demands a great deal of attention in the large scale integration of ferroelectric thin film capacitors for nonvolatile random access memory applications. In this review, we discuss some of the issues relating to the etching of the ferroelectric films, patterning of the electrodes, device damage caused by the etch process and post-etch residue problems. An etch process that can provide high etch rates and good etch anisotropy for the current candidate ferroelectrics including Pb(Zr, Ti)O3 and layered structure SrBi2Ta2O9 thin films using environmentally benign gases such as hydrochlorofluorocarbons is presented. The etch mechanism for both of these materials was determined to rely substantially on ion bombardment effects. For example, PZT films were etched anisotropically at rates of up to 60 nm/min using CHCIFCF3 gas under high rf power and low gas pressure conditions. Problems remain with respect to the acrosswafer differential etch rates observed when more than one phase is present in the material (e.g., amorphous/pyrochlore + perovskite phases in PZT). Damage caused by the etch process which can lead to changes in device characteristics, including hysteresis and fatigue properties, and the underlying mechanism that causes the damage are discussed. O2 was found to be a suitable etch gas for etching the conductive oxide electrode material RuO2. However, an anomaly in the etch rate was detected upon introduction of a small amount of fluorine containing gas: addition of 2% of CF3CFH2 gas to the O2 plasma increases the etch rate by a factor of four. This can be taken advantage of in obtaining high etch selectivity between the electrode and ferroelectric layers.