The power handling capabilities of fiber lasers are limited by the technologies available to fabricate and assemble the key optical system components. Previous tools for the assembly, tapering, and fusion of fiber laser elements have had drawbacks with regard to temperature range, alignment capability, assembly flexibility and surface contamination. To provide expanded capabilities for fiber laser assembly, a wide-area electrical plasma heat source was used in conjunction with an optimized image analysis method and a flexible alignment system, integrated according to mechatronic principles. High-resolution imaging and vision-based measurement provided feedback to adjust assembly, fusion, and tapering process parameters. The system was used to perform assembly steps including dissimilar-fiber splicing, tapering, bundling, capillary bundling, and fusion of fibers to bulk optic devices up to several mm in diameter. A wide range of fiber types and diameters were tested, including extremely large diameters and photonic crystal fibers. The assemblies were evaluated for conformation to optical and mechanical design criteria, such as taper geometry and splice loss. The completed assemblies met the performance targets and exhibited reduced surface contamination compared to assemblies prepared on previously existing equipment. The imaging system and image analysis algorithms provided in situ fiber geometry measurement data that agreed well with external measurement. The ability to adjust operating parameters dynamically based on imaging was shown to provide substantial performance benefits, particularly in the tapering of fibers and bundles. The integrated design approach was shown to provide sufficient flexibility to perform all required operations with a minimum of reconfiguration.