This thesis is concerned with explanations of embodied cognition as internal simulation. The hypothesis is that several cognitive processes can be explained in terms of predictive chains of simulated perceptions and actions. In other words, perceptions and actions are reactivated internally by the nervous system to be used in cognitive phenomena such as mental imagery. This thesis contributes by advancing the theoretical foundations of simulations and the empirical grounds on which they are based, including a review of the empiricial evidence for the existence of simulated perceptions and actions in cognition, a clarification of the representational function of simulations in cognition, as well as identifying implicit, bodily and environmental anticipation as key mechanisms underlying such simulations. The thesis also develops the ³inception of simulation² hypothesis, which suggests that dreaming has a function in the development of simulations by forming associations between experienced, non-experienced but realistic, and even unrealistic perceptions during early childhood. The thesis further investigates some aspects of simulations and the ³inception of simulation² hypothesis by using simulated robot models based on echo state networks. These experiments suggest that it is possible for a simple robot to develop internal simulations by associating simulated perceptions and actions, and that dream-like experiences can be beneficial for the development of such simulations