The basic equations governing noise phenomena are derived from first principles and applied to examples in optical communications. Quantum noise arises from two sources, the momentum fluctuations of electrons at optical frequencies and the uncertainty-related fluctuations of the electromagnetic field. Shot noise results from the beating of the noise sources with the signal field. In high-gain amplifiers, the spontaneous-emission noise dominates shot noise and results in a noise figure of at least 3 dB. It is shown explicitly how, at high power, both the laser field and the laser noise source become classical. The increase in noise in lasers with open cavities is not due to enhanced spontaneous emission as once thought, but to single-pass amplification. The noise fields and spontaneous currents have Gaussian distributions, while nonlasing modes have exponential photon-number distributions. Low-frequency intensity fluctuations arise from the electric current driving the laser and can be sub-Poissonian, in contrast to shot noise, which has a Poissonian distribution. The calculational tools are a wave equation for the field operator and a rate equation for the carrier-number operator, each containing spontaneous current noise sources. The correlation functions of these sources are determined by the fluctuation-dissipation theorem.[S0034-6861(96)00503-X]