We review the principles and characteristics of a novel tunable external-cavity laser diode source. It can operate as either a continuous wave (CW) single-wavelength, a CW dual-wavelength, a single-wavelength mode-locked, or a tunable dual-wavelength mode-locked laser. The gain medium is a commercial laser diode array. The telescopic external cavity consists of a grazing-incidence grating, a lens and a stripe-mirror. The external cavity provides functions of wavelength selection, dispersion compensation and spatial mode control. The characteristics of the laser under CW or mode-locked operation are described. The dual-wavelength laser output exhibits beat note beyond 7 THz. The tunable multi-terahertz beat frequency is characterized by a non-collinear intensity autocorrelation technique. A dual-wavelength interferometer that uses a tunable dual-wavelength laser as the light source is demonstrated. Finally, theoretical analysis is presented, which demonstrates that the dual-wavelength output of the laser is stable if the modes at the two wavelengths correspond to different array lateral modes.