An analytical model of cw quasi-three-level lasers that includes the influence of energy-transfer upconversion (ETU) has been developed. The results of the general output modeling were applied to a laser with Gaussian beams, and rigorous numerical calculations have been made to study the influence of ETU on threshold, output power, spatial distribution of population-inversion density, and fractional thermal loading. The model was applied to a laser operating at 946 nm in Nd:YAG, where the dependence of laser-beam size on laser performance was investigated in particular. A simple model for the degradation of laser-beam quality from a transversally varying saturated gain is proposed that is in good agreement with measurements of the laser in a plane-plane cavity.