In this study, we systematically investigate the effect of InGaN insertion layer (IL) on nitride-based light-emitting diodes. First, a series of samples with different InGaN ILs (Si doping level, thickness) were fabricated and investigated. An optimized condition of the IL was obtained based on current–voltage and electroluminescence measurements. Furthermore, in order to investigate the dominant mechanism for the improved performance of the samples with IL, the optimized sample and a control sample without InGaN IL were compared by means of X-ray diffraction, atomic force microscopy, photoluminescence, injection-current-dependent electroluminescence measurements and infrared camera images. Based on the discussion of these measurement results, we conclude that the performance improvements of samples with InGaN IL are due to both the effects of strain relaxation and better current spreading.