We calculate total and differential production rates of D* masons in two-ph
oton collisions at LEP2. We include full next-to-leading order QCD correcti
ons, and perform an extensive study of the sensitivity of our predictions t
o variations of the renormalization scale, charm mass, photonic parton dist
ribution set and fragmentation function. The results are compared with rece
nt data from LEP2. (C) 2000 Elsevier Science B.V. All rights reserved.