Kelvin probe force microscopy is used to observe the bulk potential redistribution across the high power InGaAs/AlGaAs/GaAs separate confinement heterostructure quantum-well laser diodes for a wide range of injection currents, including the lasing regime. By increasing the injection current, the development of a parasitic voltage drop is detected at initial calibration layers and the buffer layer of the laser structure. Catastrophic degradation of the laser mirror was observed at the level of injection current ∼19 times the threshold value. Atomic force microscopy images of the mirror revealed a 100 nm deep crater of maximum width ∼2.5 μm in the vicinity of the buffer/emitter interface. By combining the surface morphology results of the destructed mirror with those of Kelvin probe force microscopy in operating devices, it is concluded that the parasitic voltage drop is responsible for a substantial energy dissipation and the nonoptical degradation of the laser mirror.