Modelling and simulation are very important for revealing the relationship between process parameters and internal variables like grain morphology in solidification, precipitate evolution, and solid-state phase transformation in laser additive manufacturing. The impact of the microstructural changes on mechanical behaviors is also a hot topic in laser additive manufacturing. Here we reviewed key developments in thermal modelling, microstructural simulations, and the predictions of mechanical properties in laser additive manufacturing. A volumetric heat source model, including the Gaussian and double ellipsoid heat sources, is introduced. The main methods used in the simulation of microstructures, including Monte Carlo method, cellular automaton, and phase field method, are mainly described. The impacts of the microstructures on mechanical properties are revealed by the physics-based models including a precipitate evolution based model and dislocation evolution based model and by the crystal plasticity model. The key issues in the modelling and simulation of laser additive manufacturing are addressed.