The aero-optical distortions caused by compressible flows have been used by researchers for flow diagnostics and accepted by designers of airborne optical systems as a performance penalty. In order to estimate these distortions, an understanding of the optical distortion mechanism is required. This article examines the mechanisms which produce a variable-density field (and accompanying index-of-refraction field) in a nearly incompressible shear-layer flow. The two-dimensional-shear-layer velocity field was approximated using a discrete vortex model. From this ‘known’ velocity field, the pressure and density fields were determined by iteratively solving the unsteady Euler equations. The resulting index-of-refraction field produced simulated schlieren images which closely resemble experimental schlierens. Optical wavefronts computed from the simulation reasonably match the behaviour of large-scale aberrations measured in a transonic wind tunnel. Small-scale distortions in the experimental data may have been caused by boundary layers on the splitter plate and tunnel walls or by three-dimensional effects that were not simulated.