An integrated injection laser‐waveguide‐detector device is described, fabricated from AlxGa1−xAs layers grown by liquid‐phase epitaxy. Reflectors are formed by a two‐step preferential etch procedure. For a laser cavity formed by one etched reflector and one cleaved mirror, an overall differential transfer efficiency of 10±1% has been measured at the detector after transmission through a 1‐&mgr;m‐thick passive waveguide 250 &mgr;m long. If both reflectors are etched, efficiencies as high as 2% are still observed.