Buried-heterostructure lasers (BH lasers), having a narrow active region and a low threshold current, oscillate stably in a single transverse mode in a wide range of driving currents above threshold. In addition, no significant kinks can be observed in the light output vs. current characteristics. Sinusoidal modulation characteristics of BH lasers are measured especially with respect to frequency response, spectrum broadening and nonlinear distortion. From experiments, it is exhibited that BH lasers have a flat frequency response up to 2 GHz, with less spectrum broadening than conventional wide stripe lasers, and a low 2nd-order distortion of about 50 dB below the fundamental level. This distortion is favourable when compared to LED's. These results demonstrate the feasibility of BH lasers as promising optical sources with linear and wideband modulation capabilities.