In the thesis, the error and stability analysis is made for the 2D Helmholtz equation by the method of fundamental solutions (MFS) using both Bessel and Neumann functions. The bounds of errors in bounded simply-connected domains are derived, while the bounds of condition number are derived only for disk domains. The MFS using Bessel functions is more efficient than the MFS using Neumann functions. Interestingly, for the MFS using Bessel functions, the radius R of the source points is not necessarily larger than the maximal radius r_max of the solution domain. This is against the traditional condition: r_max < R for MFS. Numerical experiments are carried out to support the analysis and conclusions made.