This paper presents numerical modeling of noise and distortion of semiconductor lasers subject to two-tone modulation for use in the cable television (CATV) systems. The waveform of the laser signal is simulated over wide ranges of the modulation index and placements of the modulation channel. The power spectrum and the frequency spectrum of the relative intensity noise (RIN) are characterized, and the associated second-order harmonic distortion (2HD), and the second-order (IMD2) and third-order intermodulation distortions (IMD3) are calculated. The calculated data are used to predict the measures of the CATV system performance. The dynamic range of linearity of the laser is evaluated in terms of the spurious free dynamic range (SFDR). We show that under weak modulation, the low-frequency RIN is constant at -168 dB/Hz regardless the modulation frequency. Within this accepted noise level, IMD2 is 4 dBm higher than 2HD and 10 dBm higher than IMD3. When the modulation index exceeds 25%, the laser emits clipped signals associated with large values of signal distortions. Accepted noise and distortion values correspond to lower modulation index and/or modulation channel frequency.