The performance and analysis capability for earth observation systems (PACEOS) computer simulation software was developed by Martin Marietta Astro Space to assist in the evaluation of concepts and designs for space based remote sensing systems. This development took place over the last five years. PACEOS models the entire remote sensing process from the source of the radiation to the information required by the users. The simulation is divided into six primary sections which account for: (1) geometric corrections; (2) radiance sources and propagation; (3) sensor, detector, and platform properties; (4) data processing and transmittal; (5) data analysis; and (6) generation of user products, data, and images. PACEOS simulates the performance of earth and atmospheric remote sensing, surveillance, and early warning systems and is primarily used for concept definition and evaluation of hardware/software performance to evaluate the effects of sensor, platform, and processing parameters on the quality and accuracy of the information provided to the ultimate users. This paper discusses the procedures used to generate and propagate radiance from its source to the sensor aperture, including the effects of variations in surface albedo and temperature, illumination source and location, cloud layers and types, atmospheric models and parameters, cloud motion, target characteristics and location, spatial resolution, sensor bandpass, and geometric corrections. Microwave scene generation capabilities and other enhancements are being added to the current UV, visible, and IR capabilities under internal development efforts.