Microbunching instability (MBI) driven by beam collective effects is known to be detrimental to high-brightness storage rings, linacs, and free-electron lasers (FELs). One known way to suppress this instability is to induce a small amount of energy spread to an electron beam by a laser heater. The distribution of the induced energy spread greatly affects MBI suppression and can be controlled by shaping the transverse profile of the heater laser. Here, we present the first experimental demonstration of effective MBI suppression using a LG_{01} transverse laser mode and compare the improved results with respect to traditional Gaussian transverse laser mode at the Linac Coherent Light Source. The effects on MBI suppression are characterized by multiple downstream measurements, including longitudinal phase space analysis and coherent radiation spectroscopy. We also discuss the role of LG_{01} shaping in soft x-ray self-seeded FEL emission, one of the most advanced operation modes of a FEL for which controlled suppression of MBI is critical.