The fabrication process and characteristics including 5-Gb/s transmission of an integrated light source consisting of a λ/4-shifted DFB laser and an electroabsorption (EA) modulator were discussed. By introducing a semi-insulating (SI) InP on the butt-joint region, both the large electrical isolation resistance (> 10 MΩ) between the laser and the modulator and a high optical coupling efficiency (>80%) between them were achieved. A typical threshold current was 50–70 mA, and single-mode operation at 1.576 µm was maintained up to 5.5-mW output power. The modulation voltage to swing between 90% transmission and 10% transmission was 6.2–12 V, depending on the modulator length in the range 1000-400 µm. The 3-dB bandwidth was 7.7 GHz and a linewidth enhancement factor α of 0.9 was estimated from the sideband-to-carrier ratio of the spectra. A 5-Gb/s NRZ (1,0) pattern was transmitted through 73-km conventional fiber with a dispersion of 1467 ps/nm, and no error floor was observed. The α value was estimated to be between 0 and 1 from the transmission data, and good agreement with that from the sideband-to-carrier ratio was obtained. © 1990 IEEE