The invention provides a light emitting diode and a driving method thereof, a light source device and electronic equipment, and relates to the technical field of semiconductors. The light emitting diode comprises a substrate, a reflective light emitting layer, a first electrode, a second electrode, a first insulating layer, a saturable absorber layer, a third electrode, a fourth electrode and a reflective composite layer, wherein the reflective light emitting layer disposed on the substrate; the first electrode, the second electrode and the first insulating layer are separately arranged on thereflective light emitting layer; the saturable absorber layer disposed on the first insulating layer; the third electrode, the fourth electrode and the reflective composite layer are separately arranged on the saturable absorber layer, and the reflectivity of the reflective light emitting layer is greater than that of the reflective composite layer; and orthographic projections of the saturable absorber layer, the third electrode, the fourth electrode and the reflective composite layer on the reflective light emitting layer are not overlapped with the first electrode and the second electroderespectively. According to the invention, after the light emitted by the reflective light emitting layer passes through the saturable absorber layer, the light with low energy is absorbed more, and the light with high energy is absorbed less, so that the full width at half maximum of the spectrum of the light emitting diode is reduced, and the color purity of the colored light of the light emitting diode is improved.