Long-wavelength InAlGaAs VCSELs with Al₂O₃ embedded current-confinement structures are reported. Using atomic layer deposition, the current confinement structures are fabricated by depositing Al₂O₃ on airgap surfaces of undercut apertures, which are formed by laterally etching the active region. 1.57 µm VCSELs showing an output power of over 1 mW and direct modulation characteristics at 4 Gbit/s are reported using these current-confinement apertures.