A systematic study has been carried out on organic light-emitting diodes (OLEDs) with a transparent MgAg/ITO cathode. The most dominant imperfections in surface-emitting OLEDs were electrical shorts and attributed to radiation damage incurring in ITO deposition due to the presence of pinholes in the MgAg protective layer. When adding an ITO surface layer on a semitransparent MgAg thin film. an increase in luminance efficiency was observed and exhibited a strong dependence on ITO thickness. By carefully selecting processing conditions and device layer structures we fabricated surface-emitting OLEDs with excellent luminance efficiency and good operational stability.