The rapid growth of internet and cloud computing applications drives a huge demand for bandwidth capacity in communication networks, while power consumption, cost, and space density must scale down. This growth leads to an increase in the size of data centers (longer optical links), and of the fibers’ channel data rate, rooted in Moore’s Law. Until now, multi-mode fibers (MMF) have been largely employed in datacom applications due to the large coupling tolerance. However, the data-carrying capability of MMF decreases with the transmission distance due to pulse broadening resulting from modal and chromatic dispersion. In order to overcome those limits, transceivers based on single mode fiber (SMF) are under development and the first systems are on the market. Vertical-cavity surface-emitting lasers (VCSELs) are the transmitters of choice for short-reach applications due to their low cost, energy efficiency, and small footprint. InP-based VCSELs emitting at long wavelengths (i.e. 1.3 and 1.55 µm) have gained large interest due to their intrinsic lower power consumption (lower band gap) and low losses in silicon waveguides and silica-based optical fibers, which allows longer transmission distances. While short-wavelength GaAs-based VCSELs have achieved small-signal modulation bandwidths up to 30 GHz , InP-based VCSELs show inferior modulation capabilities [2, 3]. Up to date, the highest small-signal bandwidth demonstrated on InP-based devices is 22 GHz . The distributed Bragg reflectors (DBRs) commonly used for GaAs-based VCSELs are made of binary and ternary semiconductor compounds, which offer several advantages such as high refractive-index contrast between the layers, good electrical conductivity and low thermal resistivity. The inferiority of semiconductor DBRs lattice matched to InP challenges the modulation bandwidth enhancement of InP-based devices which suffer of poor thermal conductivity, and high lateral spreading resistance. A further challenge is the single-mode laser operation that has motivated the transition from MMF to SMF in datacom systems. In this chapter, the challenges related to InP-based VCSELs are discussed with focus on active region design, cavity engineering, and current and optical confinement. These arguments apply to all InP-based VCSELs with emission wavelength between 1.3 and 2.0 µm. Stationary and dynamic characteristics are presented for a 1.55 µm VCSEL. Finally, datacom and telecom transmission experiments are presented.