An LED lamp includes a heat sink, a plurality of LED modules attached to the heat sink, and an envelope disposed on the base of the heat sink. The heat sink includes a base and a plurality of fins extending from the base. The envelope defines a receiving groove therein surrounding the LED modules. The receiving groove is stepped to have an upper portion and a lower portion recessed downwardly from a bottom of the upper portion. The LED lamp further includes an annular waterproof gasket. The waterproof gasket includes a main body received in the upper portion of the receiving groove and an engaging portion protruding downwardly from a bottom thereof and engagingly received in the lower portion of the receiving groove. The lower portion and the upper portion of the receiving groove are both rectangular in cross-section.