This is an interesting and often-asked question about laser engraving. In general the answer is ‘no’ but there are exceptions, read on to discover them!
Wood – Starting with the easiest material, wood and similar like MDF, plywood and other organic materials like card and paper, the answer is no as the laser will burn the material giving the characteristic laser-engraved dark shades. The shades can be varied slightly but in general you’ll pay more attention to a good dot size (as the laser will scorch the material slightly around the edge of the dot, increasing it in size a little) and produce shading by dithering areas of grey if you were engraving an image
Card – Coloured card is something of an exception here as it is possible to produce varying hues by altering the laser power in the ranges lower than cutting power. This however is affecting the card’s dye rather than the card itself and will vary in outcome with the individual cardstock in question
Slate – When engraving (or more accurately ‘marking’) slate, the laser power will create subtle variations in the marking colour from a light grey to a golden-yellow colour. This can be exploited to some degree for subtle effects but the variation isn’t so extreme that you could really treat it as different colours as you might for a colour printing effect.
MOPA – MOPA lasers will reproduce colour on metal, they work differently to other lasers with incredibly short pulses of laser power which can be tuned in such a way that they anneal the metal, creating reliably reproducible colour on the surface as shown in the above steel example courtesy of Trotec Laser.
So can lasers engrave in colour? The answer is yes, but only in specific cases with particular equipment and with particular materials.