A polarization-stable single-mode 894 nm vertical cavity surface emitting laser (VCSEL) with an orthogonal polarization suppression ratio of 30 dB, even at a temperature up to 80°C, was achieved for atomic clock applications by utilizing shallow-surface gratings. An improved grating VCSEL fabrication technology for mass production was also proposed by taking advantage of the displacement Talbot lithography. The multi-mode grating VCSEL was also measured for other applications that need polarization stability, such as doubled-data-rate polarization multiplexed free-space links.