A current output of a drive signal, modulated between two current settings, is applied to a laser diode, e.g. VCSEL. The settings are selected such that laser diode's power output meets the average power and peak power limits of the eye safety standards. The drive signal having a duty cycle toggling between the two settings. The duty cycle is selected such that the average and peak power limits are met for the given upper current setting. The drive circuit may include an analog modulator or digital analog converter (DAC) for maintaining the lower and upper current settings. When the drive circuit is implemented as an integrated circuit, the DAC may be incorporated into the IC. The sensitivity of the DAC is selected to maintain the desired lower and upper current settings.