The performance of III‐nitride based high‐power light emitting diodes (LEDs) is reviewed. Direct color high‐power LEDs with 1 × 1 mm2 chip size in commercial LUXEON® Rebel packages are shown to exhibit external quantum efficiencies at a drive current of 350 mA ranging from ∼60% at a peak wavelength of ∼420 nm to ∼27% at ∼525 nm. The short wavelength blue LED emits ∼615 mW at 350 mA and >2 W at 1.5 A. The green LED emits ∼110 lm at 350 mA and ∼270 lm at 1.5 A. Phosphor‐conversion white LEDs (1 × 1 mm2 chip size) are demonstrated that emit ∼126 lm of white light when driven at 350 mA and 381 lm when driven at 1.5 A (Correlated Color Temperature, CCT ∼ 4700 K). In a similar LED that employs a double heterostructure (DH) insign instead of a multi‐quantum well (MQW) active region, the luminous flux increases to 435 lm (CCT ∼ 5000 K) at 1.5 A drive current. Also discussed are experimental techniques that enable the separation of internal quantum efficiency and extraction efficiency. One technique derives the internal quantum efficiency from temperature and excitation‐dependent photoluminescence measurements. A second technique relies on variable‐temperature electroluminescence measurements and enables the estimation of the extraction efficiency. Both techniques are shown to yield consistent results and indicate that the internal quantum efficiency of short wavelength blue (λ ∼ 420 nm) high‐power LEDs is as high as 71% even at a drive current of 350 mA. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)