A self-consistent time-domain travelling-wave model for the simulation of self-assembled quantum dot (QD) vertical cavity surface emitting lasers (VCSELs) is developed. The 1-D time-domain travelling-wave model takes into consideration of time-varying QD optical susceptibility, refractive index variation resulting from intersubband free-carrier absorption, homogeneous and inhomogeneous broadening, and QD spontaneous emission noise source. Carrier concentration rate equations are considered simultaneously with the travelling wave model. Effects of temperature on optical susceptibility and carrier density in the active region are taken into account. The model is used to analyze the characteristics of 1.3-µm oxide-confined QD InAs-GaAs VCSEL. The field distribution resulting from time-domain travelling-wave equations, in both the active region and distributed Bragg reflectors, is obtained and used in finding the device characteristics including light-current static characteristics considering the thermal effect. Furthermore, the dynamic characteristics and modulation frequency response are obtained in terms of inhomogeneous broadening.