A simulator for the computer-aided design of holograms is developed. The direction and intensity of the reconstructed beam are calculated using the Kirchhoff diffraction integral and Kogelnik's coupled- wave theory. Grating distortions induced by physical changes in the recording medium are evaluated using the diffraction integrals, and imaging characteristics are analyzed using ray tracing. Simulator results can be used to evaluate wavefront aberrations of the reconstructed images, and holograms that compensate for aberrations can be designed by the simulator. Examples are given where recording and reconstruction wavelengths are different and where the grating is distorted by nonuniform shrinkage of the medium. Also, to illustrate practical application, a holographic optical element lens and a wavelength demultiplexer are designed and evaluated."