Low-cost long-wavelength lasers operating at high temperatures without cooling systems are required for optical subscriber systems. InAsP multi-quantum-well (MQW) lasers have been attracting much interest because of their good high-temperature performance((1),(2)). This performance has been attributed to a large conduction band discontinuity (Delta E-c) preventing carrier leakage in the InAsP/InP system ((3)) compared with conventional InGaAsP/InP systems. However, our recent study revealed a relatively small Delta E-c in the InAsP/InP system. Based on this band line-up, it is possible to form a type-I band profile by using InAlGaAs as a barrier instead of InGaAsP. The InAsP/InAlGaAs QW system should have a large Delta E-c (>300 meV) sufficient to suppress the carrier leakage at a high temperature. In this paper, we present the band line-up study of this system and report on growth and characterization of this newly proposed strain-compensated InAsP/InAlGaAs MQW lasers for the first time. The lasers exhibited a threshold current density of 1.1 kA/cm(2) with a characteristic temperature as high as 116 K which is promising for realizing a cooling system free 1.3-mu m laser.