We report a novel method for growth and fabrication of high performance strained InGaAs/AlGaAs quantum-well buried-heterostructure (BH) lasers. The method involves growth of the laser structure by molecular beam epitaxy, mesa formation by in situ melt etching using SiO₂ stripes as a mask, and regrowth of p^--p-n AlGaAs isolating layers by liquid phase epitaxy. The method allows etching, preservation of high quality sidewalls, regrowth, and planarization in one step with negligible thermal disordering. Compared to ridge waveguide lasers, the BH lasers so fabricated have significantly lower threshold current, higher power output, higher temperature operation, lower cavity losses, and kink-free light-current (L-I) characteristics, as expected. A cw power of 150 mW/facet at 986 nm was measured from a 400-μm-long BH laser with 11 μm active stripe width. A minimum threshold current of 2.5 mA was measured for lasers with 3.0 μm active width and 300-400 μm cavity length. The L-I characteristics of 500-, 800-, and 1300-μm-long lasers with 3.0 μm active width were linear up to the currents corresponding to a current density of 10 kA cm^-2. At higher current densities, a sublinear increase of power with current was observed. Stable fundamental transverse mode operation was obtained up to 100 mW emitted power.