The IEEE 802.11 family of specifications is by far the most prominent and successful technique for accessing WLANs. Because the channel used by wireless devices is a time-varying broadcast medium, these devices need to have multi-rate and rate-adaptive capability to adapt to the changing channel so that better performance can be achieved. In this paper, we propose an analytical model, which we call Rate-Adaptive Markov Chains, to study the saturation throughput and delay performance of an 802.11 WLAN in which the mobile hosts have multi-rate support, will use the ARF protocol to adapt rates for different channel qualities, and follow the DCF protocol to contend for data transmissions in a slowly-varying channel. Simulation results are also provided to verify the correctness of the model.