"Optical vortices are singularities in phase fronts of laser beams. They are characterized by a dark core whose size may dramatically affect their behavior upon propagation. Previously, only large-core vortices have been extensively studied. The object of the research presented in this dissertation was to explore ways of generating small-core optical vortices (also called optical vortex filaments), and to examine their propagation using analytical, numerical and experimental methods. Computer-generated holography enabled us to create arbitrary distributions of optical vortex filaments for experimental exploration. We used hydrodynamic paradigms to develop an heuristic model which described the dependence of vortex motion on other vortices and the background beam, both qualitatively and quantitatively. We predicted that pair of optical vortex filaments will rotate with angular rates inversely proportional to their separation distance (just like vortices in a fluid). We also reported the first experimental observation of this novel fluid-like effect. It was found, however, that upon propagation in linear media, the fluid-like rotation was not sustained owing to the overlap of diffracting vortex cores. Further numerical studies and experiments showed that rotation angle may be enhanced in nonlinear self-defocusing media. The results presented in this thesis offer us a better understanding of dynamics of propagating vortices which may result in applications in optical switching, manipulation of micro-particles and optical limiting."