In a p-n junction diode, the depletion region is formed due to the diffusion of charge carriers across the junction, creating a region with no mobile charge carriers. When a forward bias is applied, the potential barrier is reduced, causing the width of the depletion region to decrease. As the forward bias increases, the electric field due to the bias overcomes the barrier, reducing the width of the depletion region.
Thus, when the forward bias is increased, the width of the depletion region decreases.