Abstract: We present a new performance model for a prioritized optical burst switch architecture employing fiber delay lines (FDLs) as optical buffers to reduce the burst loss probability. The performance of such architecture cannot be captured accurately using traditional queueing models since FDLs behave fundamentally differently from conventional electronic buffers. We formulate a Markovian model to evaluate the system performance when the burst arrival process is Poisson and the burst lengths are exponentially distributed. Both the balking and bounded delay characteristics of FDLs are captured in the model. A conservation law is used to extend the analysis to a system implementing differentiated services with two prioritized traffic classes. The extended model captures the system dynamics for high priority traffic and yields a good approximation for low priority traffic. We also find that the previously developed models are approximations of our general model in the regimes of short and long FDLs. Our numerical results validate the accuracy of our modeling approach and demonstrate significant performance gains when FDLs are employed as optical buffers.