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IEEE 802.11 WLANs support multi-rate data transmission where senders select proper data rates suitable for receivers' current channel conditions. However, most previous performance studies assume a single-rate system and the perfect channel conditions. In this paper, we develop an analytic model that can accurately estimate the performance of multi-rate IEEE 802.11 WLANs with channel error. Like G. Sharman et al. (2006), we model an entire WLAN system with multiple stations as a Markov chain where a state is defined by the transmission rate and backoff stage. We perform extensive performance study to evaluate the correctness and accuracy of the proposed model. The performance results indicate that the new analytic model accurately estimate the performance of 802.11 MAC. The proposed model can be extended to get more system dynamic.