We investigate the effects of the refractive index of the encapsulant on the light-extraction efficiency (LEE) of light-emitting diodes (LEDs) for GaN LEDs (n ≈ 2.5) and AlGaInP LEDs (n ≈ 3.0). For non-absorbing rectangular parallelepiped LED chips, as the refractive index of the encapsulant increases, the LEE first increases quasi-linearly, then increases sub-linearly, and finally a saturation is reached. Furthermore, LEDs with a dual-layer graded-refractive-index (GRIN) encapsulant (n(encapsulant 1) = 1.57 and n(encapsulant 2) = 1.41) is fabricated through a two-step curing process. We demonstrate that such an LED further enhances the LEE by reducing Fresnel reflection loss at the encapsulant/air interface by 35% compared with an LED encapsulated with a single-layer encapsulant (n(encapsulant) = 1.57).