The filtering mechanism, spectral selectivity, and tuning performance of the vertical Mach-Zehnder (VMZ) laser diode are studied. Wavelength selection in this device is due to the interference of two modes with different and electronically controllable optical path lengths in analogy to a common Mach-Zehnder interferometer. Different design approaches for the VMZ laser are investigated. The calculations presented show that tuning ranges between 50 nm and 100 nm with side-mode suppression ratios (SSR's) of more than 20 dB are feasible. Designs with tuning ranges of about 35 nm show SSR values of over 30 dB at the 1.55 /spl mu/m wavelength enabling the realization of widely tunable laser diodes with full wavelength access within the tuning range, suitable for applications in optical communication systems.