With the growing importance of power quality problems to electric utilities and customers, there is an increased focus on the search for new tools and techniques for accurate analysis and resolution of such problems. This paper reviews currently available techniques for the modeling and simulation of time-varying harmonics in real-time. Following a brief summary of the currently used off-line harmonics modeling and simulation methods, the principles and system element representations using wave digital filter (WDF) and discrete wavelet transform (DWT) methods are discussed. Hardware and software architectures of real-time network simulator (RTNS), HYPERSIM, and PC-cluster based real-time simulator are presented. Towards the end, two case studies are given to demonstrate the real-time analysis of time-varying harmonics generated by a three-phase arc furnace using the PC-cluster based real-time simulator, and a real-time hardware-in-the-loop (HIL) equipment testing using the real-time digital simulator (RTDS).