The FUSE is an astrophysics satellite designed to make observations at high spectral resolving power in the 90.5- 118.7 nm bandpass. This NASA Origins mission will address many important astrophysical problems, including the variations in the deuterium/hydrogen ratio in the Milky Way and in extragalactic clouds, the kinematics and distribution of O5+ and other hot gas species in the Galactic disk and halo, the properties of molecular hydrogen in interstellar clouds having a wide variety of temperatures and densities, and the properties of stellar and planetary atmospheres. Between August 1997 and January 1999 an extensive series of vacuum optical test was conducted, first with the spectrograph alone and then with the full satellite in flight-like conditions. Numerous UV spectra were obtained and found to be consistent with performance requirements. We also obtained visible light images with the fine error sensor camera, whose performance will be critical for meeting the demanding pointing requirements of FUSE. In this paper we present estimates of the performance of the instrument, including spectral resolution, line shapes, and effective area. We also present data on the visible light performance of the FES.