Membrane Distillation (MD) is an emerging sustainable desalination technique. While MD has many advantages and can be powered by solar thermal energy, its main drawback is the low water production rate. However, the MD process has not been fully optimized in terms of its manipulated and controlled variables. This is largely due to the lack of adequate dynamic models to study and simulate the process. In addition, MD is prone to membrane fouling, which is a fault that degrades the performance of the MD process. This work has three contributions to address these challenges. First, we derive a mathematical model of Direct Contact Membrane Distillation (DCMD), which is the building block for the next parts. Then, the proposed model is extended to account for membrane fouling and an observer-based fouling detection method is developed. Finally, various control strategies are implemented to optimize the performance of the DCMD solar-powered process. In part one, a reduced-order dynamic model of DCMD is developed based on lumped capacitance method and electrical analogy to thermal systems. The result is an electrical equivalent thermal network to the DCMD process, which is modeled by a system of nonlinear differential algebraic equations (DAEs). This model predicts the water-vapor flux and the temperature distribution along the module length. Experimental data is collected to validate the steady-state and dynamic responses of the proposed model, with great agreement demonstrated in both. The second part proposes an extension of the model to account for membrane fouling. An adaptive observer for DAE systems is developed and convergence proof is presented. A method for membrane fouling detection is then proposed based on adaptive observers. Simulation results demonstrate the performance of the membrane fouling detection method. Finally, an optimization problem is formulated to maximize the process efficiency of a solar-powered DCMD. The adapted method is known as Extremum Seeking (ES). A Newton-based ES is designed and the proposed model is used to accurately forecast the distilled water flux. Although good results are obtained with this method, a practical modification to the ES scheme is proposed to enhance the practical stability.