A system for self-aligning assembly and packaging of semiconductor lasers allows reduction of time, cost and testing expenses for high power density systems. A laser package mounting system, such as a modified TO-can (transistor outline can), has modifications that increase heat transfer from the active laser to a heat exchanger or other heat sink. A prefabricated heat exchanger assembly mounts both a laser package and one or more lenses. Direct mounting of a fan assembly to the package further minimizes assembly steps. Components may be physically and optically aligned during assembly by clocking and other indexing means, so that the entire system is self-aligned and focused by the assembly process without requiring post-assembly adjustment. This system can lower costs and thereby enable the use of high powered semiconductor lasers in low cost, high volume production, such as consumer items.