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Single- and multimode vertical-cavity surface-emitting lasers (VCSELs) with three unstrained GaAs quantum wells (QWs) and emission wavelengths around 850 nm have been fabricated using molecular beam epitaxy (MBE) for crystal growth. Wet chemical etching and subsequent selective oxidation are applied for current confinement. The influence of oxide layer position on lateral index guiding is studied in detail in order to increase maximum single-mode output power. A device of 3-/spl mu/m active diameter and reduced index guiding shows maximum single-mode output power of 2.25 mW with a side-mode suppression ratio (SMSR) of more than 30 dB for high-efficiency oxidized VCSELs.