Temperature-dependent and excitation-power-dependent photoluminescence (PL) measurements were carried out on In0.23Ga0.77N/GaN single-quantum-well structures to study exciton localization effect and quantum-confined-Stark effect (QCSE). Based on the optical power measurement of the light-emitting diodes (LED) using above SQW as an active region, this paper indicates that QCSE has much stronger influence on the performance of LED than exciton localization effect. For InGaN/GaN-based laser diodes (LD), our study indicates that QCSE should be further reduced and that exciton localization effect should also be highly emphasized, which could decrease the threshold current for stimulated emission. Consequently, a pulsed-current-generated LD is successfully fabricated. A 10 mum-width ridge-geometry LD without any facet coating can be operated at a threshold current density of around 11kA/cm(2) at room temperature.