A new materials processing system with a Nd: YAG laser was developed and operated in FMS. This system was applied to remove burrs generated along the involute curve after gear cutting and to break chips generated at the finishing stage of sleeves boring. Automatic debarring and chip breaking operations have been achieved for the first time to produce gears and sleeves. Specifically speaking, a Nd: YAG laser debarring head, a chip breaking head and an optical switch were specially designed and produced. They were installed on the processing station in the FMS, together with a YAG laser oscillator and condensing optics which feed a laser beam into affine core fiber. The machine complex station interfaces the YAG laser processing system. The 3rd cell of the station traces an involute curve, thus enabling the removal of burrs, or holds a chip breaking head and bores a sleeve chucked by the 1st cell simultaneously breaking a generated chip.