The effect of optical confinement factor and gain constant (optical gain coefficient) on harmonic distortion in 1,55 μm. semiconductor laser diodes are investigated by using a mathematical model based on multi-mode rate equations. The model can be extended and used to simulate the output of any direct modulated Fabry-Perot semiconductor laser in long wavelength by changing some of the parameters. Gain and spontaneous emission are included as spectrums, since each mode experiences different gain and spontaneous emission coupled to each mode is different. The important parameters such as Auger recombination, nonradiative recombination, spontaneous emission life time and gain saturation are included in the model. The second harmonic distortion levels are examined and computed graphically for different threshold levels.