This paper presents a performance study done on a semiconductor laser diode in a moisture condensing environment. Devices with laser diodes are used in a wide variety of electronic applications and in the various climatic conditions. The motivation behind this study is a common environmental exposure, where a device using a laser diode is brought into a relatively humid building from a dry, cold, outside environments. Under such conditions, condensation occurs on various components of the device, including the diode, which could affect the laser output power. Device performance could be affected since the laser diode and the lens are susceptible to degradation due to such repetitive condensation conditions. The test vehicle chosen for this study was an optoelectronic package using a 980 nm laser diode. These are used in products for a broad range of markets, including data communications, aerospace, material processing, scientific, and defense industries [Pliska , "Wavelength Stabilized 980nm Uncooled Pump Laser Modules for Erbium-Doped Fiber Amplifiers," Opt. Lasers Eng., 43, pp. 271–289; Righetti, 1996, “Amplifiers Pumped at 980 nm in Submarine Applications,” European Conference on Optical Communication, Vol. 3, pp. 75–80; Pfeiffer , 2002, "Reliability of 980 nm Pump Lasers for Submarine, Long-haul Terrestrial, and Low Cost Metro Applications," Optical Fiber Communication Conference and Exhibit, pp. 483–484]. These products may be used in environmental conditions that could result in condensation within the product. A hermetic package could address this concern, but it is an expensive option. Nonhermetic packaging for the laser component could help to lower the cost of these devices; however, these packages have important failure mechanisms that are a potential concern. Prior research reported performance studies conducted on similar packages at elevated temperature, humidity, and power conditions using accelerated tests [Pfeiffer , 2002, "Reliability of 980 nm Pump Lasers for Submarine, Long-haul Terrestrial, and Low Cost Metro Applications," Optical Fiber Communication Conference and Exhibit, pp. 483–484; Park and Shin, 2004, “Package Induced Catastrophic Mirror Damage of 980nm GaAs High Power Laser,” Mater. Chem. Phys., 88 (2-3), pp. 410–416; Fukuda , 1992, “Reliability and Degradation of 980nm InGaAs/GaAs Strained Quantum Well Lasers,” Qual. Reliab. Eng., 8 , pp. 283–286]. However, studies conducted that specifically addressed condensation measurements have not been previously reported. Hence, an attempt was made to study package performance with condensation, to address the identified concern for the current package. A test method based on a military standard specification was used for this purpose. Elevated temperature and humidity (without condensation) were found to affect the laser power. These were characterized to isolate the effect of condensation alone. The package was subjected to repetitive condensing cycles and laser output power was recorded as a function of time, temperature and humidity. The variation in laser output power due to condensation was observed and quantified. Results showed a temporary power degradation of approximately 5% with condensation. This was a repeatable effect throughout the test time. Visible water droplets were found in various areas of the package after the test cycle. This could lead to potential failure mechanisms during the device life time.