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The rapidly growing demand for higher networking capacity and data rates is forcing researchers to explore the unused spectrum in the higher frequency bands. Two such bands, the millimeter wave (mmWave), ranging from 30 GHz to 300 GHz, and the Terahertz (THz) band, ranging from 0.1 THz to 10 THz, are currently being investigated for possible use in future networks. Because many atmospheric molecules have their natural resonant frequencies in these bands, it is important to understand the effects of molecular absorption and re-radiation on the wireless networking performance in such high frequency bands. Building on the recently discovered molecular absorption models, this thesis conducts a theoretical study on the effect of molecular absorption and re-radiation on both single-antenna and multiantenna wireless communications. For the single-antenna communication, the study focuses on quantifying the temporal and spatial variation of path loss and noise, which is caused by variation in the molecular composition in the air. In particular, it studies the extent of spatio-temporal variation of mmWave channels in three largest cities of Australia by investigating the hourly air quality and weather data over 12 months. The study finds that mmWave channels experience significant variation in both space and time domains, which causes undesirable network capacity fluctuation in various places and hours. For the multi-antenna communication, the study yields a new theoretical discovery that the Multiple-Input and Multiple-Output (MIMO) capacity can be significantly influenced by atmosphere molecules. In more detail, some common atmosphere molecules, such as Oxygen and water, can absorb and re-radiate energy in their natural resonant frequencies, such as 60 GHz, 120GHz and 180 GHz, which belong to the mmWave spectrum. Such phenomenon can provide equivalent Non-Line-of-Sight (NLoS) paths in an environment that is dominated by Line-of-Sight (LoS) transmissions, and thus greatly improve the spatial multiplexing and diversity of a MIMO mmWave system. Finally, the performance of two main MIMO techniques, beamforming and multiplexing, in the terahertz band is studied. Our results reveal a surprising observation that the MIMO multiplexing could be a better choice than the MIMO beamforming under certain conditions in multiple THz bands. We believe that our findings will open the door for a new direction of research and development toward the feasibility of communication in mmWave and THz spectrum.