Although it is known that the small‐signal gain calculations are in agreement with experimental results of lowest threshold for the zero‐order mode in the thick‐cavityPpnNjunction laser, the theory for lasing mode stability under large‐signal conditions has not been previously investigated. In this paper, a study is given of the geometrical conditions under which the best dynamic stability is obtained for the lasing mode in a structure capable of supporting several modes. Solutions are obtained for the carrier and gain spatial profiles in the active region of an injection laser under large‐signal conditions by accounting for both spontaneous and stimulated recombination. The effect of stimulated emission in a lasing mode on the gain of a nonlasing mode is calculated. It is found that, for certain positions of thep‐njunction within the optical cavity, an increase in lasing power in the zero‐order mode suppresses the gain in higher‐order modes. The optimum geometry for dynamic stability of the lasing zero‐order mode is obtained when the gain region is two‐thirds of the waveguide thickness, consistent with the condition for lowest zero‐order mode threshold. In addition, the results also show that the quasi‐Fermi level in the gain region changes as a function of stimulated power in such a way as to keep its spatially ``averaged'' value nearly constant. However, the position of the quasi‐Fermi level at thep‐ninterface increases with increased optical power, thereby leading to a finite and positive junction differential resistance. Finally, for a double‐heterostructure (DH) laser the calculated internal conversion efficiency, which is the ability of the stimulated field to extract power from the junction, is shown to decrease significantly when the thickness of the active region exceeds a carrier diffusion length.