We demonstrate a wafer-level integration of a distributed feedback laser diode (DFB LD) and high-efficiency Mach-Zehnder modulator (MZM) using InGaAsP phase shifters on Si waveguide circuits. The key to integrating materials with different bandgaps is to combine direct wafer bonding of a multiple quantum well layer for the DFB LD and regrowth of a bulk layer for the phase shifter. Buried regrowth of an InP layer is also employed to define the waveguide cores for the LD and phase shifters on a Si substrate. Both the LD and phase shifters have 230-nm-thick lateral diodes, whose thickness is less than the critical thickness of the III-V compound semiconductor layers on the Si substrate. The fabricated device has a 500-µm-long DFB LD and 500-µm-long carrier-depletion InGaAsP-bulk phase shifters, which provide a total footprint of only 1.9 × 0.31 mm2. Thanks to the low losses of the silica-based fiber couplers, InP/Si narrow tapers, and the phase shifters, the fiber-coupled output power of 3.2 mW is achieved with the LD current of 80 mA. The MZM has a VπL of around 0.4 Vcm, which overcomes the VπL limit of typical carrier-depletion Si MZMs. Thanks to the high modulation efficiency, the device shows an extinction ratio of 5 dB for 50-Gbit/s NRZ signal with a low peak-to-peak voltage of 2.5 V, despite the short phase shifters and single-arm driving.