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The manufacture of a high-quality reliable thin-film filter (TFF) requires a detailed understanding of the stresses created within the device during fabrication. The ability to systematically approximate the internal stress effect on optical performance is of crucial importance to provide fabrication guidance and improve manufacturing yield. This paper analyzes the internal stress distributions in the substrate and thin-film layers of a 50-GHz TFF and examines the relation of these stresses to the filter's optical characteristics. A linear model along the thickness direction is introduced based upon Townsend's theory of multilayer structures. The analytical results for the key optical parameters are in good agreement with measurements on fabricated filters. This model analyzes the effects of process parameters, such as the substrate type, its coefficient of thermal expansion, and the final substrate thickness on the optical performance of the transmission spectrum center wavelength, transmission passband ripple and isolation, the chromatic dispersion, and polarization-mode dispersion.