Despite the considerable research interest in InGaN‐based microdisk lasers, owing to their unique circular geometry distinct from vertical cavity surface‐emitting lasers (VCSEL) or edge‐emitting lasers, commercial products remain scant due to deficient performance under electrical injection. This study proposes an innovative method integrating a thin‐film configuration with a metallic undercut, significantly augmenting optical confinement, overlap factor, and thus lasing performance. This approach results in a diminished lasing threshold from 1500 to 670 Wcm−2 and a record high quality (Q) factor of 10100 under electrical injection. Strain relaxation in the metallic undercut, identified via scanning near‐field optical microscopy (SNOM), beneficially mitigates the Quantum Confined Stark Effect (QCSE), boosting the internal quantum efficiency of the laser. Furthermore, a beneficial blue‐shift in the emission spectrum aligns with the lasing peak, strengthening the Q factor. A tactfully implemented recessed top contact enables electrical injection lasing without optical performance compromise. The study provides invaluable insights for future microdisk laser technology advancements, potentially leading to specialized functionalities, including quantum optics, thereby opening new avenues for research and applications in this field.