Abstract The current generation of macroscopic and microscopic simulation packages do not have control algorithms that incorporate many of the advanced features now available in commercial traffic control hardware. Consequently, there is a need to develop cost effective procedures for evaluating state of the practice traffic signal control equipment so that informed deployment and design decisions can be made. These same procedures can also be used by researchers to develop new algorithms for applications such as transit priority or adaptive control. In order to achieve that objective, this paper presents the motivation for using hardware-in-the-loop simulation procedures. Hardware-in-the-loop simulation presents a new set of challenges for traffic engineering model developers as the “correctness” of a real-time model not only depends upon the numerical computation, but the timeliness with which the simulation model interacts with external control equipment. This paper reviews the state of practice, summarizes the fundamental technologies necessary for implementing such a system, and uses a simple statistical test for assessing the real-time errors introduced into a simulation model.