We present a coupled-wave analysis for square-lattice photonic crystal lasers with transverse electric polarization. A model consisting of eight plane waves coupled by Bragg diffraction is used to describe two-dimensional optical coupling. The resonant frequencies and threshold criteria for the modes of oscillation have been determined for the case of index periodicity with a lattice of circular holes. The spatial intensity distributions of these resonant modes have also been calculated. For the fundamental modes, we have investigated how the intensity distribution varies as a function of coupling strength. The dependence of the threshold gain of these modes on hole size has also been elucidated. This semianalytical approach provides a comprehensive understanding of square-lattice photonic crystal lasers and allows more effective optimization of their cavity design.