Interband recombination in bulk indium-rich InGaN is studied via both spontaneous and stimulated emissions. Based on the low-temperature luminescence and absorption data, the magnitude of the edge tails in conduction and valence bands is determined, and the non-thermal energy distribution of excess holes localized in the fluctuating band potential is revealed. We show that the combination of carrier localization effects and Auger-determined interband rates fully accounts for the experimentally observed stimulated emission thresholds and gain values (∼20–30 kW/cm2 and >100 cm−1, respectively) at low temperatures (T < 100 K). It is suggested that exploiting structural disorder to keep injected holes below the mobility edge, thus suppressing defect-related recombination, is a prerequisite for high-temperature infrared lasing from degenerate InGaN with relatively temperature-stable threshold intensities of some 100 kW/cm2.