The evaluation of the interactive nonlinear performance of an electro-optical system is often best achieved by exercising the system in the context of a simulated environment which provides more complex and realistic stimuli than bench tests at less than field testing. The systematic behavior of an electro-optical device, test goals, and simulator resources jointly constrain an appropriate simulation environment. It is the responsibility of the simulation specialist to recognize the peculiar qualities of the object system and to provide for it an environment which, in its relevant characteristics, is practically indistinguishable from the real world, and which is sufficient to exercise the system over its entire stimulus domain. To illustrate this thesis, the location of a hypothetical missile seeker/tracker in the context of a hardware-in-the-loop simulation will be established and the manipulable features of its environment illustrated. Some aspects of such a device's response to its environment which have required special attention will be discussed.