In state of the art IC design and manufacturing certain lithography layers have unique requirements. Latitudes and tolerances that apply to contacts and polysilicon gates are tight for such critical layers. Industry experts are discussing the most cost effective ways to use feature- oriented equipment and materials already developed for these layers. Such requirements introduce new dimensions into the traditionally challenging task for the photolithography engineer when considering various combinations of multiple factors to optimize and control the process. In addition, he/she faces a rapidly increasing cost of experiments, limited time and scarce access to equipment to conduct them. All the reasons presented above support simulation as an ideal method to satisfy these demands. However lithography engineers may be easily dissatisfied with a simulation tool when discovering disagreement between the simulation and experimental data. The problem is that several parameters used in photolithography simulation are very process specific. Calibration, i.e. matching experimental and simulation data using a specific set of procedures allows one to effectively use the simulation tool. We present results of a simulation based approach to optimize photolithography processes for sub-0.5 micron contact windows. Our approach consists of: (1) 3D simulation to explore different lithographic options, (2) calibration to a range of process conditions with extensive use of specifically developed optimization techniques. The choice of a 3D simulator is essential because of 3D nature of the problem of contact window design. We use DEPICT 4.1. This program performs fast aerial image simulation as presented before. For 3D exposure the program uses an extension to three-dimensions of the high numerical aperture model combined with Fast Fourier Transforms for maximum performance and accuracy. We use Kim (U.C. Berkeley) model and the fast marching Level Set method respectively for the calculation of resist development rates and resist surface movement during development process. Calibration efforts were aimed at matching experimental results on contact windows obtained after exposure of a binary mask. Additionally, simulation was applied to conduct quantitative analysis of PSM design capabilities, optical proximity correction, and stepper parameter optimization. Extensive experiments covered exposure (ASML 5500/100D stepper), pre- and post-exposure bake and development (2.38% TMAH, puddle process) of JSR IX725D2G and TOK iP3500 photoresists films on 200 mm test wafers. `Aquatar' was used as top antireflective coating, SEM pictures of developed patterns were analyzed and compared with simulation results for different values of defocus, exposure energies, numerical aperture and partial coherence.