We study the dominant mechanism for the temperature sensitivity of the differential quantum efficiency and threshold current of 1.3 μm InP‐based strained‐layer multiple‐quantum‐well (MQW) lasers. We show that the temperature dependence of both properties is separated into two regions at critical temperature c). Below c, the temperature dependence of internal loss in the QWs plays a very important role in determining the temperature sensitivity of the differential quantum efficiency. On the other hand, above c, its temperature sensitivity is affected more by the internal loss in the separate confinement heterostructure (SCH) region. Excellent correlation is observed between the spillover of holes into the SCH region and c. It is also shown that the Auger recombination current plays a more significant role in determining the temperature dependence of threshold current below c. However, above c, electrostatic band‐profile deformation, which causes a significant increase in loss and radiative recombination current in the SCH region, plays the more dominant role than the Auger recombination current. © 1995 American Institute of Physics.