The wet oxidation of buried Al_xGa_1-xAs was investigated. The oxidation character and the dependence of oxidation rate on the temperature and Al content have been studied in details. Through analyzing oxidation mechanism and linear relationship between oxidation length and time, it is educed that the lateral oxidation of Al_xGa_1-xAs, in relatively short oxidation time, is a reaction rate limit process. Based on the optimized parameters extracted, VCSEL with 8 μm oxidation aperature was produced, whose maximum optical power output is 3.2 mW, wavelength is 978 nm and driving current is 15 mA.