Further reduction of the efficiency droop effect and further enhancements of internal quantum efficiency (IQE) and output intensity of a surface plasmon coupled, blue-emitting light-emitting diode (LED) by inserting a dielectric interlayer (DI) of a lower refractive index between p-GaN and surface Ag nanoparticles are demonstrated. The insertion of a DI leads to a blue shift of the localized surface plasmon (LSP) resonance spectrum and increases the LSP coupling strength at the quantum well emitting wavelength in the blue range. With SiO2 as the DI, a thinner DI leads to a stronger LSP coupling effect, when compared with the case of a thicker DI. By using GaZnO, which is a dielectric in the optical range and a good conductor under direct-current operation, as the DI, the LSP coupling results in the highest IQE, highest LED output intensity, and weakest droop effect.