A way to determine some important etching parameters in the step fabrication for high Tc step-edge Josephson junctions is described based on an analysis of the dynamics of the etching process. The optimum thickness of the etch mask is defined with negligible recession of the mask edge during the etch. Under this condition, the equilibrium angle of the steps etched on the SrTiOs (STO) substrate with an Nb mask has been calculated to be about 76°. With optimized mask thickness, its sharp sidewall and straight edge, high-quality steps on STO substrates with step height from 200-300nm and step angle above 70° are made. Josephson junctions and dc-SQUIDs with high reproducibility and less parameter scatter are obtained on the step substrates.