Wavelength division multiplexed (WDM) optical networks are rapidly becoming the technology of choice in network infrastructure and next-generation Internet architectures. WDM networks have the potential to provide unprecedented bandwidth, reduce processing cost, achieve protocol transparency, and enable efficient failure handling. This dissertation addresses the important issues of improving the performance and enhancing the reliability of WDM networks as well as modeling and evaluating the performance of these networks. Optical wavelength conversion is one of the emerging WDM enabling technologies that can significantly improve bandwidth utilization in optical networks. A new approach for the sparse placement of full wavelength converters based on the concept of the k-Dominating Set (k-DS) of a graph is presented. The k-DS approach is also extended to the case of limited conversion capability using three scalable and cost-effective switch designs: flexible node-sharing, strict node-sharing and static mapping. Compared to full search algorithms previously proposed in the literature, the K-DS approach has better blocking performance, has better time complexity and avoids the local minimum problem. The performance benefit of the K-DS approach is demonstrated by extensive simulation. Fiber delay line (FDL) is another emerging WDM technology that can be used to obtain limited optical buffering capability. A placement algorithm, k-WDS, for the sparse placement of FDLs at a set of selected nodes in Optical Burst Switching (OBS) networks is proposed. The algorithm can handle both uniform and non-uniform traffic patterns. Extensive performance tests have shown that k-WDS provides more efficient placement of optical fiber delay lines than the well-known approach of placing the resources at nodes with the highest experienced burst loss. Performance results that compare the benefit of using FDLs versus using optical wavelength converters (OWCs) are presented. A new algorithm, A-WDS, for the placement of an arbitrary numbers of FDLs and OWCs is introduced and is evaluated under different non-uniform traffic loads. This dissertation also introduces a new cost-effective optical switch design using FDL and a QoS-enhanced JET (just enough time) protocol suitable for optical burst switched WDM networks. The enhanced JET protocol allows classes of traffic to benefit from FDLs and OWCs while minimizing the end-to-end delay for high priority bursts. Performance evaluation models of WDM networks represent an important research area that has received increased attention. A new analytical model that captures link dependencies in all-optical WDM networks under uniform traffic is presented. The model enables the estimation of connection blocking probabilities more accurately than previously possible. The basic formula of the dependency between two links in this model reflects their degree of adjacency, the degree of connectivity of the nodes composing them and their carried traffic. The usefulness of the model is illustrated by applying it to the sparse wavelength converters placement problem in WDM networks. A lightpath containing converters is divided into smaller sub-paths such that each sub-path is a wavelength continuous path and the nodes shared between these sub-paths are full wavelength conversion capable. The blocking probability of the entire path is obtained by computing the blocking probabilities of the individual sub-paths. The analytical-based sparse placement algorithm is validated by comparing it with its simulation-based counterpart using a number of network topologies. Rapid recovery from failure and high levels of reliability are extremely important in WDM networks. A new Fault Tolerant Path Protection scheme, FTPP, for WDM mesh networks based on the alarming state of network nodes and links is introduced. The results of extensive simulation tests show that FTPP outperforms known path protection schemes in terms of loss of service ratio and network throughput. The simulation tests used a wide range of values for the load intensity, the failure arrival rate and the failure holding time. The FTPP scheme is next extended to the differentiated services model and its connection blocking performance is evaluated. Finally, a QoS-enhanced FTPP (QEFTPP) routing and path protection scheme in WDM networks is presented. QEFTPP uses preemption to minimize the connection blocking percentage for high priority traffic. Extensive simulation results have shown that QEFTPP achieves a clear QoS differentiation among the traffic classes and provides a good overall network performance.