Micro-light-emitting diode displays are generating considerable interest as a promising technology for augmented-reality glasses. However, the fabrication of highly efficient and ultra-small ( <3 μm) micro-light-emitting diodes, which are required for augmented-reality applications, remains a major technical challenge due to the presence of strong sidewall nonradiative recombination. In this study, we demonstrate a 3.5 × 3.5 μm2 blue GaN micro-light-emitting diode with negligible sidewall nonradiative recombination compared with bulk nonradiative recombination. We achieve this by using an ultralow-damage dry etching technique, known as neutral beam etching, to create the micro-light-emitting diode mesa. Our 3.5 × 3.5 μm2 micro-light-emitting diode exhibits a low decrease in external quantum efficiency of only 26% at a current density of 0.01 A/cm2, compared with the maximum external quantum efficiency that is reached at the current density of ∼3 A/cm2. Our findings represent a significant step towards realizing micro-light-emitting diode displays for augmented-reality glasses.