We have investigated the structural characteristics of II‐VI separate confinement heterostructure lasers grown on GaAs substrates and containing Zn1-xMgxSySe1-y quaternary cladding layers, ZnSe or ZnSySe1-y guiding layers and Zn1-zCdzSe quantum well active layers. The study was performed with a combination of transmission electron microscopy and high resolution x‐ray diffraction techniques. We found that the quaternary cladding layers remain pseudomorphic to the GaAs substrate although they can be lattice mismatched up to 0.1%. When the 0.5‐μm‐thick optical guiding layer contains ZnSe, there is partial relaxation of the laser structure by misfit dislocations at the lower cladding‐guiding layer interface and the threading dislocation density in the Zn1-zCdzSe quantum well active region is about 107 cm-2. However, when lattice matched (to GaAs)ZnSySe1-y is used as the guiding layer the entire laser structure is pseudomorphic and the threading dislocation density is ≪106 cm-2. The combination of low defect density and enhanced carrier and optical confinement by using Zn1-xMgxSySe1-y quaternary cladding layers has produced significant improvement in the room temperature threshold current (500 A/cm2) and maximum operating temperature (394 K).