In this study, Amplitude-phase relationship of laser diodes is analyzed under modulation with the help of the transfer functions. The dynamic behaviour of laser diodes is observed as functions of both damping and relaxation resonance frequencies. Within the linear system approach, the amplitude-phase relationship is harmonious up to some extent and both of them have dependence on each other. Phase changes occurring within the system are not stable and cause oscillations which prevent the system from stable working. These oscillations have some threshold value and the system may be driven in to chaos after this point.