Over the last two decades of the 20th century, technologies for microsystems fabrication have made considerable progress. This has made possible a large variety of new commercial devices ranging, for example, from integrated pressure and acceleration microsensors to active micromirror arrays for image projection. In the near future, there will be a number of new devices, which will be commercialized in many application areas. The field of microsystems is characterized by its wide diversity, which requires a multidisciplinary approach for design and processes as well as in application areas. Although there is a common technological background derived from integrated circuits, it is clear that microsystems will require additional application-specific technologies. Since most microsystem technologies are based on batch processing and dedicated to mass production, prototyping is likely to be an expensive and time-consuming step. It is recognized that standardization of the processes as well as of the design tools will definitely help reduce the entry cost of microsystems. This creates a very challenging situation for the design, modelling and simulation of microsystems.This text gives an overview of the problems associated with modelling and simulation of microsystems. It introduces a new methodology, which is supported by several examples. It should provide a useful starting point for both scientists and engineers seeking background information for efficient design of microsystems.