Quasi optics involves beams of radiation propagating in free space which are limited in lateral extent when measured in terms of wavelengths and for which diffraction is of major importance. Employing beams which are moderately well collimated and which have a Gaussian distribution of field and power transverse to their axis of propagation allows the simple and elegant theory of Gaussian optics to be applied. Gaussian beams and Gaussian optics systems have come to play a major role at millimeter wavelengths and to dominate submillimeter system design. This is a result of the very low loss over extremely broad bandwidths that can be obtained with this means of propagation, together with the wide variety of components that can be effectively realized. In this review I first summarize the basic theory of quasi-optical Gaussian beam propagation and beam transformation by simple optical elements, and then briefly discuss coupling to and between Gaussian beams. Guidelines for Gaussian optics system design are reviewed, the most important being beam truncation and matching. I discuss passive components in the terahertz frequency range based on quasi-optical propagation, including polarization processors, filters, diplexers, and ferrite devices, and describe some active quasi-optical devices, including multielement oscillators, frequency multipliers, and phase shifters. Some specific applications of quasi-optical systems are also briefly described.