The extraction of small‐signal parameters is of great importance for the modeling of InP heterojunction bipolar transistors (HBTs). This letter proposes an improved small‐signal parameter extraction method that considers both the emitter–collector capacitance effect and the current crowding effect. The corresponding parameter extraction procedure based on closed‐form equations is outlined. Furthermore, the model parameter extraction method is validated using two different‐sized InP HBT devices with multibias S‐parameters. The results demonstrate that the established small‐signal model exhibits greater than 90% accuracy across the frequency range of 1–110 GHz. In particular, in the high‐frequency band (above 50 GHz), the proposed model exhibits an improvement in accuracy of 7.4% after considering the emitter–collector capacitance and current crowding effects. This method can contribute to accurate modeling of the noise and large‐signal performance of InP HBT.