The Advanced Research Projects Agency (ARPA) sponsored the development of a prototype of the n rt-generation ship design system. The results of the project, titled Simulation-Based Design (SBD), were demonstrated in June of 1994. Based on its success and on the benefits it offers over today's systems, ARPA has initiated a new program to full)' develop SBD. The goal is to create a virtual environment in which a ship can be totally designed, manufactured, operated, and evaluated before a single plate is cut, part is ordered, or piece of equipment is purchased. The ramifications of such a tool are widespread across both the commercial and naval shipbuilding markets, and SBD will, undoubtedly, lead to changes in the way we do business. Newport News Shipbuilding (NNS) was a partner on one of the teams responsible for developing one of the two prototypes considered by ARPA. As such, they have had an opportunity to weigh the impact of such a system in today's marketplace. This paper discusses some of the capabilities that SBD will provide to shipbuilders of the future, especially in the areas of concurrent design, coupled analyses (e.g., seakeeping and structural analysis), digital mockups, and manufacturing simulation.