Laser diodes modelocked to date are gain modulated in an external resonator. The reflection from the diode face internal to the resonator causes a dependence of gain upon frequency that cannot be described by a simple bell‐shaped function. Previous analyses treating modelocking by modulation of loss are generalized to treat modulation of gain with a general frequency dependence. We arrive at a limit on pulse width achievable with gain modulation of a laser diode in an external resonator and evaluate the limit for typical parameters.