Rapidly growing 802.11 wireless local area networks continue to gain polarity in business and computer industry. This growing popularity and usage also caused many improvements on both physical layer and security mechanisms. In this study we investigated the performance of wireless local area networks (WLANs) and security mechanisms available for WLANs. These security mechanisms are Wired Equivalent Privacy (WEP), Wi-Fi Protected Access (WPA) and 802.11i (WPA2). To examine the impacts of encryption and integrity protection mechanisms provided by WEP, WPA and WPA2, we developed a simulation software. In the first part of our study we tested the performance of IEEE 802.11b, 802.11g and 802.11i networks without security. In the second part we implemented the security mechanisms and investigated the impacts of these security mechanisms on the performance of wireless local area networks.