The epitaxy material and device for high quantum efficiency and small optical loss 980 nm laser diode (LD) were designed and fabricated. The maximal electro-optical conversion efficiency of the standard 1cm laser bar with micro-channel cooler is 60.0% under continuous-wave (CW) working condition, the corresponding slope efficiency and output power are 1.1 W/A and 38.2 W, respectively. The measured internal loss coefficient and internal quantum efficiency are 0.58 cm-1 and 91.6%, respectively. The result shows that the improvement of electro-optical conversion efficiency is due to new InGaAs/GaAsP strain-compensated quantum well and the large optical-cavity waveguide structure.