The optical gain of wurtziteInxGa1−xN/In0.02Ga0.98NandGaN/AlxGa1−xNquantum well (QW) lasers taking into account many-body effects is investigated. The valence band structures are calculated as a function of strain and well thickness. The inclusion of compressive strain shows better lasing performance because of the increase of the subband energy separation in the valence band. Our theoretical gain spectra ofIn0.15Ga0.85N/In0.02Ga0.98NQW lasers are in good agreement with measured ones reported by Nakamura, IEEE J. Sel. Top. Quantum Electron.3, 712 (1997). It is also shown that there is a universal relation governing the dependence of the band-gap renormalization on the two-dimensional carrier density for GaN-based QW lasers as there is for the infrared III-V systems. ©1998 American Institute of Physics.