The system theory of the single-mode laser-diode is developed in this paper. Limits of the mathematical validity of the rate equations are analyzed and discussed. The theoretical model of the single-mode laser-diode obtained is shown to be a stable low-pass system whose pole positions are injection current dependent. A Volterra model of the laser diode with electronic feedback is obtained. Conditions for stability are obtained from the model and stability is shown to be dependent on the injection current. It is shown that the system is a bandpass filter whose center frequency and bandwidth can be specified by the feedback parameters. The Volterra model also allows the determination of the nonlinear distortion and, in contrast to optical feedback, methods for reducing it by modifying the feedback operator. © 2003 Elsevier Science B.V. All rights reserved.