The fabrication and characterization of double-heterostructure (DH) laser that utilizes an indium-tin oxide (ITo) transparent cladding and top contact layer. The first room-temperature lasing operation has been obtained from ITO/InGaAsP/AlGaAs DH laser diode at threshold current density of 12.1 kA/cm2. The interfacial recombination velocity of ITO/InGaAsP interface was estimated to be 4.9 x lo4 cm/s from a simple model to account for high threshold current, and optical measurements of spontaneous emission and lasing spectra from top stripe window and facet were done.