Laser annealing of a semiconductor wafers using a forming gas for localized control of ambient oxygen gas to reduce the amount of oxidization during laser annealing is disclosed. The forming gas includes hydrogen gas and an inert buffer gas such as nitrogen gas. The localized heating of the oxygen gas and the forming gas in the vicinity of the annealing location on the surface of the semiconductor wafer creates a localized region within which combustion of oxygen gas and hydrogen gas occurs to generate water vapor. This combustion reaction reduces the oxygen gas concentration within the localized region, thereby locally reducing the amount of ambient oxygen gas, which in turn reduces oxidation rate at the surface of the semiconductor wafer during the annealing process.