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An improved structure of a terraced substrate (TS) laser is presented. The injected current distribution is calculated and compared with that in a conventional TS laser. It is shown that 90 percent of the total current is injected in a filamentary stripe region between the two bends of the active layer by the improved structure. A TS laser with a very low threshold current of 12 mA is obtained at a cavity length of 120 μm under continuous operation. Output powers obtained by the TS laser with and without a facet coating are 70 and 40 mW per facet, respectively. The improved TS laser shows both stable fundamental and longitudinal mode oscillations as in the conventional TS laser. The operating time of TS lasers is estimated to be more than h at room temperature from the result of accelerated life tests at the high temperature of 70°C.