The effects of energy transfer between electrons and holes on the small-signal modulation response of semiconductor lasers are theoretically investigated. We calculate the electron energy relaxation time due to electron–hole scattering from the first principle. We show that its value is comparable to the electron energy relaxation time due to the electron–LO phonon scattering with the effect of nonequilibrium LO phonons. In such a case, the nonlinear gain coefficient due to carrier heating defined in the small-signal modulation response of semiconductor lasers is no longer a simple sum of the term due to electron heating and that due to hole heating. ©1997 American Institute of Physics.