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We have developed a numerical model for investigating material heating and its effects on the performance of optically pumped InP-based long-wavelength semiconductor disk lasers. Material heating and optical wavefront distortion due to thermal lensing are analyzed, and different approaches to reduce the intrinsic material heating are investigated numerically and experimentally. The results obtained indicate that material heating is significant in such lasers due to the poor thermal properties of the InP-based epitaxial layers of the gain chip. Substrate removal is shown to be an insufficient method to reduce the material heating; instead, crystalline heat spreaders bonded to the gain chip surface provide a convenient way to reduce the thermal impedance. Important parameters for such heat spreaders are a high thermal conductivity and a low thermooptic coefficient (dn/dT). With the use of a synthetic diamond heat spreader, a maximum pump limited output power of 780 mW in a near diffraction limited beam (M2<1.2) was demonstrated at -33°C and 100 mW at room temperature.