We study the statistical properties of a three-level laser where cascade co
herent excitation as a two-step process is used as a coherent pump and a la
ser field is generated on the upper transition, It is shown that the laser
intensity fluctuations are suppressed up to 50% below the shot noise limit
and that the laser linewidth is reduced below the Schawlow-Townes formula b
y more than one order of magnitude of the laser intensity. By transforming
to the picture dressed by the coherent field on the upper transition, we id
entify a transfer of the lower coherent excitation to be responsible for th
e quantum noise reduction. Cascade coherent excitation turns out to be a ne
w way in which one can create a pathway for recycling of active electrons a
nd regularization of laser excitation process, The conditions for the physi
cal realization of the Raman scheme (Ritsch et al 1992 Europhys. Lett. 19 7
) as a limiting case is discussed.