Most highly efficient perovskite solar cells employ mixed iodide–bromide photoactive layers; however, understanding the beneficial effect of the low (5–15 mol %) bromide content is incomplete. Here, a series of MAPb(I1–xBrx)3 perovskite layers are investigated to understand the origin of the high peak power conversion efficiency (19.2%) observed at small bromide content (0.10 ≤ x ≤ 0.125). For the x = 0.125 perovskite, 200 meV shallower energy levels are revealed, accompanied by a reduced density of trap states and stable tetragonal mixed-halide phase with compressed unit cell. In contrast, the higher bromide content samples (x > 0.125) show deeper energy levels, cubic perovskite crystal structure, and signs of halide segregation. Surface photovoltage measurements unveil an undesirable band bending at the hole transport layer/perovskite interface for MAPbI3 and x > 0.125 mixed-halide layers, which is eliminated for the x = 0.125 perovskite because of its shallower Fermi level, enabling enhanced device performance.