Optically pumped laser action is demonstrated in InGaN/GaN double heterostructure lasers with wet-etched facets. The facets are formed by a two-step etching process which creates vertical facets with less than 5 nm roughness. The first step, photoenhanced electrochemical wet etching, is used to define the laser cavities. The second step reduces the facet roughness by crystallographic wet chemical etching. Lasing is demonstrated by an increase in the differential quantum efficiency, linewidth narrowing, and strongly polarized output above threshold. The threshold varies with cavity length from 2.4 MW/cm2 for 500 μm cavities to 23 MW/cm2 for 50 μm cavities. A modal loss of 15 cm−1 is deduced from an analysis of the threshold pumping power as a function of cavity length. © 2000 American Institute of Physics.