LED is developing rapidly as one kind of light sources. The history of LED is reviewed,and LED′s efficacy is analyzed theoretically. LED′s efficacy and cost for application are compared with conventional light sources. An overview of technology status of LED′s materials,chip,packaging and metal organic chemical vapor deposition (MOCVD) is presented. The possible ways to increase LED′s internal quantum efficiency and thus efficacy are also discussed. As a result,it is predicted that LED will dominate in light sources after LED′s efficacy increases significantly.