This paper demonstrates theoretical characterization of intensity modulation of semiconductor lasers (SL’s). The study is based on a small-signal model to solve the laser rate equations taking into account suppression of optical gain. Analytical forms of the small-signal modulation response and modulation bandwidth are derived. Influences of the bias current, modulation index and modulation frequency as well as gain suppression on modulation characteristics are examined. Computer simulation of the model is applied to $1.55-\mu$m InGaAsP lasers. The results show that when the SL is biased far-above threshold, the increase of gain suppression increases both the modulation response and its peak frequency. The modulation bandwidth also increases but the laser damping rate decreases. Quantitative description of the relationships of both modulation bandwidth vs. relaxation frequency and maximum modulation bandwidth vs. nonlinear gain coefficient are presented.