For a finite group $H$, let $Irr(H)$ denote the set of irreducible characters of $H$, and define the ‘zeta function’ $\zeta^H(t) = \sum_{\chi \in Irr(H)} \chi(1)^{-t}$ for real $t > 0$. We study the asymptotic behaviour of $\zeta^H(t)$ for finite simple groups $H$ of Lie type, and also of a corresponding zeta function defined in terms of conjugacy classes. Applications are given to the study of random walks on simple groups, and on base sizes of primitive permutation groups.