This thesis describes the development of a computer-based simulator for transmission analysis in optical wavelength division multiplexing networks. A great part of the work concerns fundamental optical network simulator issues. Among these issues are identification of the versatility and user-friendliness demands which such a simulator must meet, development of the "spectral window representation" for representation of the optical signals and finding an effective way of handling the optical signals in the computer memory. One important issue more is the rules for the determination of the order in which the different component models are invoked during the simulation of a system. A simple set of rules which makes it possible to simulate any network architectures is laid down. The modelling of the nonlinear fibre and the optical receiver is also treated. The work on the fibre concerns the numerical solution of the onlinear Schrödinger equation. Adaptive step size split-step methods and a modified split-step method adapted for optical signals represented by several equivalent lowpass signals are developed. The work on the receiver model includes a fast method for computation of the time varying variance of the signal-spontaneous emission beat noise and a robust algorithm for optimizing decision time and threshold. The use of the developed simulator is illustrated with a few simulation examples which give results that agree with measurements. Incoherent optical crosstalk in ASK systems with PIN and optically preamplified receivers is investigated theoretically and experimentally. A crosstalk model based on the probability density function of the received optical power is developed. It is used for computing the crosstalk penalty as a function of the total crosstalk power and the number of crosstalk contributions. Computed and measured penalties show concurrently that the crosstalk penalty caused by a fixed total crosstalk power increases as the number of crosstalk contributions increases. Finally, simulations of systems with incoherent crosstalk is studied. It turns out that the simulation results become random variables when crosstalk is present and that it can be necessary to simulate optical signals representing perhaps 10,000 bits or even more to reduce the statistical dispersion to an acceptable level. Artificial increase of the tranmitter linewidth and the crosstalk power density spectrum representation of crosstalk are studied with a view of reducing the required number of bits.