Remarkable improvements in high temperature performance have been realized in 1.3 mum LDs for use in fiber-optic subscriber systems. At 85-degrees-C, the operating current for an MQW LD with 70% rear facet coating was as low as 37 mA under 5 mW output power. More than 12 mW of output power was also obtained at 120-degrees-C. In order to achieve further reduction in the operating current, fundamental device parameters, such as internal loss, internal quantum efficiency, gain coefficient, and transparency current density, were measured for the LDs. Using these parameters, light output power versus current characteristics were calculated for the LDs with various cavity lengths and mirror reflectivities. The calculated result shows possibility of a drastic reduction in the operating current for the LDs with short cavity (L less-than-or-equal-to 150 mum) and high reflective coating. Fabricated high-reflectivity coated short cavity lasers showed extremely low threshold current of 7 mA, and operating current of 25 mA under 5 mW output power at 85-degrees-C for a 100 mum-long LD with 70%/96% coating configuration.