Hybrid organic–inorganic perovskite semiconductors have shown potential to develop into a new generation of light‐emitting diode (LED) technology. Herein, an important design principle for perovskite LEDs is elucidated regarding optimal perovskite thickness. Adopting a thin perovskite layer in the range of 35–40 nm is shown to be critical for both device efficiency and stability improvements. Maximum external quantum efficiencies (EQEs) of 17.6% for Cs0.2FA0.8PbI2.8Br0.2, 14.3% for CH3NH3PbI3 (MAPbI3), 10.1% for formamidinium lead iodide (FAPbI3), and 11.3% for formamidinium lead bromide (FAPbBr3)‐based LEDs are demonstrated with optimized perovskite layer thickness. Optical simulations show that the improved EQEs source from improved light outcoupling. Furthermore, elevated device temperature caused by Joule heating is shown as an important factor contributing to device degradation, and that thin perovskite emitting layers maintain lower junction temperature during operation and thus demonstrate increased stability. An important design principle for perovskite light‐emitting diodes is discovered regarding optimal perovskite thickness. Adopting a thinner perovskite layer is beneficial for both device efficiency and stability, with external quantum efficiency (EQE) as high as 17.6% being achieved. The improved EQE is primarily due to better light outcoupling, and the improved stability is correlated with reduced Joule heating.