We have investigated intersubband transitions in strain-compensated AlAs/(In,Ga)As heterostructures, demonstrating both absorption and quantum-cascade laser emission at short wavelengths. Short-wavelength optical transitions in such structures are associated with a number of challenges in both the growth and design, including managing the internal strain and designing around indirect valleys. We achieve absorption peaks at wavelengths as short as 1.7 μ m in fully strain-compensated AlAs/(In,Ga)As structures. Quantum cascade lasers based on similar heterojunctions exhibit laser emission as short as 3.7 μ m. These lasers exhibit low-temperature threshold current densities of 860 A/cm(2) in pulsed mode and output power as high as 6W per facet (12W total). At room temperature, the threshold current density is 4.5 kA/cm(2) and the maximum power 240mW per facet. © 2005 Elsevier B.V. All rights reserved.