Transverse optical confinement in oxide-confined vertical-cavity surface-emitting lasers (VCSELs) crucially depends on thickness of oxide layer and its position relative to a standing wave. Modifying the structure reduces the overlap between the oxide layer and the standing wave as well as effective refractive index difference between core and cladding of the VCSEL that subsequently decreases of the number of transverse modes and increases the mode extension beyond oxide aperture. A 795 nm VCSEL is designed and fabricated with this concept. The proposed device achieves high single-mode operation of 4.1 mW at 80 °C, SMSR of 41.68 dB, and OPSR of 27.4 dB. VCSEL is applied in a nuclear magnetic resonance gyroscope (NMRG) system as pump source due to its excellent device performance and satisfactory test results are obtained.