In this study, a simulation environment has been developed to simulate signal characteristics of both underwater ambient noise and naval vehicles. This simulation environment will be used to develop algorithms for detection and classification of different naval vehicles. In the simulations, the ambient noise is modeled as Gaussian and non-stationary random process. Target radiated noise signals of vessels are created by propellers, ship machinery, turbines and other machinery. Target radiated noises with the doppler effect caused by the movement of the platform, and the time-varying statistics of random processes, due to changes in ambient conditions have been simulated. A user interface has been developed to support the simulation environment.