A transient, two-dimensional drift-diffusion model is developed for optically addressed spatial light modulators made with quantum-well materials. The transport of free and well-confined carriers is considered along with nonlinear transport effects such as velocity saturation, field-dependent carrier escape from quantum wells, and resonant absorption. In addition to full numerical solutions to the transport equations, analytical and simplified numerical solutions are developed to describe basic screening behavior and to give estimates of speed and resolution performance. In particular, a self-consistent small signal model is developed to justify the surface-charge picture often used to describe device operation. This model is also used to simulate grating formation and decay. It is found that the maximum screening rate and peak grating amplitude are achieved using vertical drift lengths much longer than the device length. A detailed analysis of resolution performance is also given in which the effects of transit time, carrier lifetime, and free and confined transport along the wells are simulated. For typical device parameters, the two main limitations to resolution performance are found to be anisotropic drift in the interior due to the quantum wells and transverse drift along the device interfaces. Two device designs are compared to assess the ability to optimize device performance by changing experimentally accessible parameters such as carrier lifetime and quantum-well escape rates. Resolutions down to 7 &mgr;m and frame rates of 100 kHz at 10 mW/cm2are achieved. ©1997 American Institute of Physics.