A three-step graded undoped-InGaN layers embedded between the GaN last quantum barrier layer and the p-AlGaN electron blocking layer was proposed and its effect on the performance of InGaN/GaN light-emitting diodes was investigated both experimentally and theoretically. In the proposed structure, the electron leakage is found to be effectively reduced, while the hole injection efficiency is simultaneously increased significantly, hence enabling a greatly enhanced radiative recombination rate within the active region. As a result, improvements of 12.25% in the optical output power and 11.98% in the external quantum efficiency are obtained from the proposed device with the respect to the reference device.