Liquid‐phase epitaxial (LPE) single and multiple thin quaternary layer In1−xGaxP1−zAszlaser diodes (x∼0.13,z∼0.28; &lgr;∼1.1 &mgr;m, 77 °K) that exhibit quantum size effects (QSE) are described. LPE quaternary active layers approachingLz∼200 A have been achieved. As a prototype for the behavior of multilayer heterostructures, the operation of single In1−xGaxP1−zAszpotential wells, or recombination layers, located a small distance into thepside of an InPp‐njunction, is considered. Almost all the carrier recombination is observed to occur in the quaternary potential well, and little absorption occurs in the single‐active‐layer structure, consistent with the small change in the effective index of refraction measured in a large range (1500 A, 150 meV). This general behavior, i.e., single‐well recombination, is observed also in thin‐active‐layer multilayer heterostructures in which the InP layers between quaternary layers are relatively thick (400–1000 A). In multilayered diode structures, distributed feedback may contribute, along with QSE, to modulation of the longitudinal (Fabry‐Perot) modes.