The linear relation of gain on carrier density in the conventional rate equation is replaced by the logarithmic relation (gain saturation effect) for quantum well (QW) lasers. The static and dynamic behaviors changes brought by this revision are analyzed. For longer cavity QW lasers, it is believed that the conventional rate equation is still a good approximation; but for short cavity QW lasers, the nonlinear gain relation must be taken into considerations. The calculations indicate that the spontaneous emission factor β and the modulation bandwidth will be overestimated in measurement or theoretical prediction if the gain saturation is neglected, especially for microcavity lasers.