This paper describes technical/mathematical solutions for simulating infra-red sensor effects. We have implemented our simulation using a PC running Windows NT and off-the-shelf image processing hardware and software. In particular, we describe the computation of the dynamic characteristics of the actual sensor package within the constraints of hardware and software environment. These characteristics can include video polarity, gain, contrast enhancement, noise, blurring, AC coupling, sensor defects, as well as video overlays (reticules/test patterns), and are applied in the post-processor phase. This paper describes the research and development into the Infra-Red Post Processor (IRPP) algorithms needed to support the sensor simulation. The system performs all the operations in real-time with a 30 Hz refresh cycle. The IRPP is modular and can be easily changed by configuration data.