For lasers modulated with a pseudorandom bit stream without prebias, the delay between the optical pulse and the current pulse depends on the number of ‘‘0’’s preceding the current pulse (‘‘1’’). Since 1’s and 0’s occur randomly in a pseudorandom bit stream and the decision circuit is designed to start sampling at a given time, this effect results in a timing jitter. The jitter induced noise and the associated power penalty are calculated. The results suggest that the ratio of the modulation current to the threshold current of the laser should be ≳25 to keep the power penalty below 1 dB at high data rates. Low threshold lasers operating without prebias are important for laser array based transmitters. ©1995 American Institute of Physics.