Abstract-With the ever increasing complexity of electronic systems and the fact that networked embedded systems become more and more widespread, substantial research has already been devoted to such issues as hardware-software co-design and co-verification, virtual prototypes, and heterogeneous simulation environments including instruction set simulators.The work presented herein, however, presents a new and efficient heterogeneous hardware-software co-simulation environment for network or communication centric distributed embedded systems. It is new, since for the first time it integrates a complete operating system kernel and thus enables testing of driver software and protocol stacks. It is efficient, since it allows intelligently turning off unnecessary simulation loads to allow for the long simulation run times typically needed for communication protocol simulation.The correctness and validity of this virtual prototyping approach are shown by comparing simulation results with reallife measurements in a prototype system developed with the presented simulation environment.