An approach is presented for evaluating the performance achieved by a closed-loop adaptive-optics system that is employed with an astronomical telescope. This method applies to systems incorporating one or several guide stars, a wave-front reconstruction algorithm that is equivalent to a matrix multiply, and one or several deformable mirrors that are optically conjugate to different ranges. System performance is evaluated in terms of residual mean-square phase distortion and the associated optical transfer function. This evaluation accounts for the effects of the atmospheric turbulence C-n(2)(h) and wind profiles, the wave-front sensor and deformable-mirror fitting error, the sensor noise, the control-system bandwidth, and the net anisoplanatism for a given constellation of natural and/or laser guide stars. Optimal wave-front reconstruction algorithms are derived that minimize the telescope's field-of-view-averaged residual mean-square phase distortion. Numerical results are presented for adaptive-optics configurations incorporating a single guide star and a single deformable mirror, multiple guide stars and a single deformable mirror, or multiple guide stars and two deformable mirrors.