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In this paper, we design a microcavity with vertical and in-plane emissions by applying double hetero-structure with mode-gap confinement in photonic crystal waveguide. The hetero-structure is formed by modulating the waveguide width locally by slightly shifting the positions of several nearest air-holes outward. By numerical calculations, we simulate the basic mode profiles and quality (Q) factors of each resonance mode. After optimizing the cavity, high simulated Q factor of 110 000 is obtained. From the well-fabricated devices, we observe the lasing emissions with Q factor of 3200 at wavelength of 1593 nm from both vertical and in-plane directions and address the lasing mode by comparing the measured results with the simulated ones. From the simulated heat transition behaviors by finite-element method, we observe the better heat dissipation provided by the waveguide region in this microcavity. This microcavity laser with locally modulated design could be potentially served as a light source with less influence on the nearby components in photonic integrated circuits.