In this paper, we used the finite difference time domain method to study the optical effect of nanostructures produced by the nanorod epitaxial lateral overgrowth (NELO) process on the light extraction of GaN Light Emitting Diode (LED). It was found that these nanostructures produced by NELO served as buffer layers for reducing stress and dislocations, as well as photon blocking layers for reducing the light penetrating sapphire substrates. We studied the effect of the nanostructure shape and density distribution on the light extraction efficiency of GaN LED because various overgrowth conditions can lead to different shapes and distributions of nanostructures. Simulation results showed that curved surface nanopores and dual-sized nanorod structures formed during overgrowth on the nanorod template have an extraction efficiency that is almost 100% higher than that of conventional LEDs, and 30% higher than that of original nanorod embedded LEDs. This is because of the higher probability of photon reflection and the strong surface scattering from the curved surface of nanopores and extra air gap of dual-sized nanorod structures. It was also shown that the density of the nano-structure occupied area affects light extraction. The simulation analysis shows that the light intensity peaks coincide in the locations of the nanopore gathered region, indicating that photon reflection is enhanced by nanopores. Experiments also showed that the electro luminescence emission from LEDs with 12.5% nanostructure density is 30% stronger than that of conventional LED. (C) 2013 Elsevier B.V. All rights reserved.