The invention relates to a light emitting diode chip with high luminous efficiency. The light emitting diode chip comprises a heat conducting substrate, a semiconductor layer, a transparent electrode layer, an ohmic contact layer and an electrode contact pad, wherein the semiconductor layer, the transparent electrode layer, the ohmic contact layer and an electrode contact pad are sequentially stacked on one side of the heat conducting substrate, far away from the heat conducting substrate. The semiconductor layer comprises a p-type semiconductor layer, an active layer, and an n-type semiconductor layer which are sequentially stacked on the heat conducting substrate. A step surface is arranged on one side of the n-type semiconductor layer, which is away from the heat conducting substrate, and the thickness of the n-type semiconductor layer in the direction away from the central area of the n-type semiconductor layer is in a step distribution and gradually decreased. The transparent electrode layer is disposed on the step surface. The ohmic contact layer is arranged between the transparent electrode layer and the n-type semiconductor layer. The electrode contact pad is opposite to the central area of the n-type semiconductor layer and is arranged on the transparent electrode layer. Additionally, the invention also relates to a method for fabricating the light emitting diode.