A method of manufacturing a light emitting diode, wherein a laser lift-off (LLO) layer and an epi-layer are formed on a nitride semiconductor substrate, and the nitride semiconductor substrate is then separated through a laser lift-off process, thereby improving the characteristics of the epi-layer and enabling to fabricate a high-grade and high-efficiency light emitting diode. Further, the LLO layer thus prepared is removed using a laser beam so that the relatively expensive nitride semiconductor substrate can be re-used, thereby reducing manufacturing costs.