Nurse educators are challenged to implement teaching strategies that promote learners' clinical competency and critical-thinking skills. Additionally, these educators are asked to base their curriculum decisions, teaching practices, and evaluation methods on current research findings. Simulation offers a unique mode for experiential learning and evaluation, but the appropriate use of the spectrum of simulation typology requires strategic planning. Although simulation provides educators with new educational opportunities, the potential use of simulation in competency testing cannot be achieved until educators and researchers acquire the knowledge and skills needed to use this education strategy, develop realistic case scenarios, and design and validate standardized and reliable testing methods. Numerous pressures exist for clinical settings to document the competencies of their employees. Simulation could be used in the practice environment to promote and validate the clinical judgment and competency of nurses.