This Phase II Small Business Innovation Research proposal is submitted as a result of a completed Phase I contract. The Phase II program will build directly upon the Phase I results, which identified vertical microcavity oxide structures that incur much lower losses than conventional oxide structures. The newly-identified structures are straightforwardly manufacturable, however there is a large parameter space of designs. The Phase II program will begin with some basic structures identified in Phase I computer simulations, adapt them to planned experimental vertical-cavity surface-emitting lasers (VCSELs) and refine them, fabricate corresponding VCSELs, and compare the simulated and experimental results. The electromagnetic simulation program will be expanded to include semiconductor rate equations and other effects, creating the world's most accurate VCSEL simulation program and which will eventually be available to anyone. A second generation of more refined VCSELs will be designed, fabricated and tested, including reliability testing. Finally, the new technology will be evaluated for applicability to multi-wavelength array formation at 1.55um for wavelength-division multiplexing (WDM). Multi-wavelength VCSEL arrays represent a much-lower-cost, more-controllable alternative to distributed-feedback laser arrays for WDM sources. The cavity improvements developed here will improve the performance of all VCSELs, especially at 1.3-1.55um.