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The improvement of efficiency and threshold of visible AlGaInP/GaInP laser diodes, which use buried AlAs native oxides for carrier and optical confinement, is described. Annealing of completed laser bars in an inert atmosphere lowers the threshold current and dramatically increases the external differential quantum efficiency. The characteristic temperature of the devices also increases from 74.8 to 125 K, indicating that the electron confinement is greatly enhanced in the annealed lasers, resulting in the observed improved performance. Secondary-ion mass spectrometry measurements reveal a reduction in hydrogen concentration in the laser cladding regions. This suggests that the improved electron confinement can be attributed to increased acceptor activation due to reduced hydrogen passivation. © 1997 American Institute of Physics.