Thermal processing of strained-layer InGaAs/GaAs/GaInP separated confinement heterostructure single quantum well lasers, grown by ps-source molecular beam epitaxy, is investigated. Rapid thermal annealing (RTA) significantly increases room-temperature photoluminescence from the quantum well and decreases the threshold current density of the lasers, due to a removal of nonradiative centers from the InGaAs/GaAs interfaces. On the other hand, RTA reduces the characteristic temperature and external differential quantum efficiency of the lasers, due to interdiffusion of Ga and In atoms at high temperatures.