Of the many methods of laser treatment for improving materials surface properties that have been reported, very few have addressed laser-assisted chemical reaction. In this work laser deposition of metal-matrix composites is reported, using chromium oxide and silicon carbide powders mixed in silica sol-gel mixtures, on EN43 mild steel substrates. Very fine SiC particles <= 1 mu m and M7C3 carbides were synthesised in situ and dispersed in ferrite matrix by this process. A diode laser at different powers and scanning speeds was applied to specimens coated with slurries of different chemical compositions. The effect of solution composition and bath depths were examined in order to achieve optimum experimental parameters. Surface morphology and microstructure of the deposited coatings and substrate surface layers were examined using optical microscopy, scanning electron microscopy (SEM) and field emission gun scanning electron microscope (FEG-SEM). Chemical composition was determined by energy dispersive X-ray analysis (EDX). The different phases were identified by X-ray diffraction (XRD). Results of microhardness measurements and wear properties of the coatings are also reported. Thermodynamic analysis of the reactions taking place is also given.