A number of nano-engineering methods are proposed and tested to improve optical properties of a laser gain medium using the self-assembled InAs quantum dot (QD) ensemble. The laser characteristics of concern include higher gain, larger modulation bandwidth, higher efficiency at elevated temperatures, higher thermal stability, and enhanced reliability. The focus of this paper is on the management of QD properties through design and molecular beam epitaxial growth and modification of QD heterostructures. This includes digital alloys as high-quality wide-bandgap barrier; under- and overlayers with various compositions to control the dynamics of QD formation and evolution on the surface; shape engineering of QDs to improve electron-hole overlap and reduce inhomogeneous broadening; band engineering of QD heterostructures to enhance the carrier localization by reduction of thermal escape from dots; as well as tunnel injection from quantum wells (QWs) to accelerate carrier transfer to the lasing state. Beneficial properties of the developed QD media are demonstrated at room temperature in laser diodes with unsurpassed thermal stability with a characteristic temperature of 380 K, high waveguide modal gain >50 cm−1, unsurpassed defect tolerance over two orders of magnitude higher than that of QWs typically used in lasers, and efficient emission from a two-dimensional (2-D) photonic crystal nanocavity.