We evaluate the effect of high‐reflectivity facet coatings on the threshold current of lattice matched and compressively strained InGaAs/InP quantum well lasers. A large decrease in the threshold current is observed in structures with low internal losses. Coated lasers exhibit threshold currents as low as 1.1 mA at 20 °C and 0.9 mA at 10 °C, down from ∼15 mA in as‐cleaved devices with cavity length of 200 &mgr;m. These changes are carefully modeled and the prospects for further reduction of the threshold current discussed.