We have achieved room‐temperature pulsed and cw lasing at 980 nm in an optically pumped vertical cavity structure grown by molecular beam epitaxy containing only a single quantum well (SQW) of In0.2Ga0.8As. Limited gain due to the extremely short active material length of 80 A˚ implies that losses due to absorption, scattering, and mirror transmission are extremely low. Using 10 ps pump pulses at 860 or 880 nm, the estimated energy density absorbed in the spacer was ∼12 fJ/&mgr;m2at threshold, indicating a carrier density approximately four times that required for transparency. Continuous wave pumping yielded an estimated threshold absorbed intensity of ∼7 &mgr;W/&mgr;m2.