The effect of indium doping in the graded‐index regions of the InGaAs/GaAs/AlGaAs graded‐index separated confinement heterostructure quantum well laser has been studied. It was found that the threshold current density can be greatly reduced by a proper amount of In doping in the graded AlGaAs region. This result is attributed to an improvement in material quality due to a reduction in group III vacancies. The effect of thermal treatment on laser performance has also been studied. Although high temperature annealing can significantly improve non‐In‐doped lasers, it has little effect on In‐doped lasers.