Various buffer management and congestion control mechanisms have been proposed to support differentiated Quality-of-Service (QoS) requirements due to the heterogeneous properties of real-world network traffic and applications. Active Queue Management (AQM) with multiple thresholds, which starts dropping packets before the queue becomes full in order to notify incipient stages of congestion, is a promising buffer allocation mechanism. With the aim to capture the effects of heterogeneous traffic and justify the choice of appropriate parameters, this paper develops an original analytical model for a finite buffer queueing system with AQM under two heterogeneous classes of traffic which are modelled, respectively, by the non-bursty Poisson Process and bursty Markov-Modulated Poisson Process (MMPP). We derive the aggregated and marginal performance metrics including the mean queue length, response time, utilization, throughput, and loss probability. Extensive simulation experiments are used to validate the accuracy of the analytical model. Furthermore the model is adopted to evaluate the performance of AQM with heterogeneous traffic and under different working conditions.