A simulation system for circuit design is disclosed. The system couples a schematic editor and simulator to allow incremental changes to a design under test without requiring prior shutdown of the simulator. The system uses a method which permits a wide range of changes to the design and provides a resulting netlist for the changed design. Changes can be made to the schematic which include changes in hierarchy, addition or deletion of components (including hierarchical components), addition or deletion of signals at any level within the design hierarchy, addition or deletion of interconnections of components at any level of hierarchy within the design, addition and deletion of interface ports for any component type, substitution of a new component for an existing one (including swapping hierarchical and behavioral descriptions), and alteration of parametric data such as device delay timing. The simulation continues to run after design changes are made. The method may be used in conjunction with hardware modeling systems.