This presentation focuses on theory, research, and practice in the application of simulations to preservice and inservice teacher education. The first of three major sections presents a brief historical review, featuring the pioneering work of Bert Kersh and his associates at the Teaching Research Division of the Oregon State System of Higher Education. A short descriptive analysis is then provided of how simulation relates to representative elements of three learning theories--operant conditioning, information processing, and the cognitive approach--followed by a review of the research on the various forms of simulation employed in teacher education that was conducted from 1960 to 1985. A rationale for using simulations is offered and illustrated with a case study, which summarizes the development of a prototype classroom simulation system from initial development through field testing. Finally, some directions for future research and development are proposed. A list of references and a flow chart of the interactive video prototype complete the document. (JB)