Nanotextured surfaces provide an ideal platform for efficiently capturing and emitting light. However, the increased surface area in combination with surface defects induced by nanostructuring e.g. using reactive ion etching (RIE) negatively affects the device’s active region and, thus, drastically decreases device performance. In this work, the influence of structural defects and surface states on the optical and electrical performance of InGaN/GaN nanorod (NR) light emitting diodes (LEDs) fabricated by top-down RIE of c-plane GaN with InGaN quantum wells was investigated. After proper surface treatment a significantly improved device performance could be shown. Therefore, wet chemical removal of damaged material in KOH solution followed by atomic layer deposition of only 10 alumina as wide bandgap oxide for passivation were successfully applied. Raman spectroscopy revealed that the initially compressively strained InGaN/GaN LED layer stack turned into a virtually completely relaxed GaN and partially relaxed InGaN combination after RIE etching of NRs. Time-correlated single photon counting provides evidence that both treatments—chemical etching and alumina deposition—reduce the number of pathways for non-radiative recombination. Steady-state photoluminescence revealed that the luminescent performance of the NR LEDs is increased by about 50% after KOH and 80% after additional alumina passivation. Finally, complete NR LED devices with a suspended graphene contact were fabricated, for which the effectiveness of the alumina passivation was successfully demonstrated by electroluminescence measurements.