The topic of this thesis is modeling and simulation of anchor handling vessels. Computer simulations of anchor handling vessels can be used to evaluate the forces acting on them, and to gain valuable insight into their operational limitations. Introductorily, an overview containing important aspects of anchor handling operations is presented. The objective is to highlight important subjects that must be considered before a simulator is developed. A simulator of an anchor handling vessel is successfully implemented in Matlab and Simulink. The simulator contains modules for ballast tanks, anti-roll tanks, cables, seabed and anchor interaction, winch systems and guide pins. The vessel model is matched up against a real anchor handling vessel to give realistic thrust characteristics. The simulator is capable of simulating both anchor deployment and anchor recovery operations in real time. Catenary equations are used to model cables. A quasi-static polynomial approach with look-up tables is used for implementation. The method allows the use of different catenary models to simulate different phases of the anchor handling operation. A catenary model of two cables with a point load, imitating the effect of an anchor, is developed based on existing catenary models in the literature. The simulator is verified through simulations. A set of case studies is used to evaluate the vessel performance during anchor deployment and recovery. The case studies consider operation in ideal and rough weather conditions, and it is shown how equipment failures and poor vessel configuration can lead to decreased vessel stability and loss of maneuvering capabilities