Computer simulation technology has been widely applied in many drilling engineering areas to simulate drilling engineering problems and optimization, to train engineers with real drilling operations and/or to handle rare applications and accidents. Among the increasingly applied drilling operations is under-balanced drilling (UBD). UBD is the drilling process in which the wellbore pressure is intentionally designed to be lower than the pressure of the formation being drilled. This results in a higher rate of penetration (ROP) and prevents fluid losses and related causes of formation damage. This paper presents the design and development of a UBD simulator, which is computer software that simulates and integrates the effects of: Bottomhole pressure (BHP). Minimum volumetric gas and liquid requirement. Required backpressure (BP) for required cutting removal to surface and controlling BHP. Kinematic energy per unit volume used in the hole cleaning considerations. Stand pipe pressure (SPP). Rock drillability. ROP. Drilling costs per metre. The goal of the simulator is to enable the user to pre-simulate different scenarios of the UBD drilling operations; therefore, the ideal optimized combination of drill bit durability and drilling efficiency, integrating all UBD operational parameters affecting the overall cost, can be obtained before the fact. The UBD simulator is designed to simulate most of the basic technologies of UBD (air, aerated and foam drilling). The goal of the UBD simulator is to design an effective UBD program by linking the BHP to rock drillability, which takes into account the effect and degree of under-balance on the effective rock strength, ROP and $/m that can be optimized for the operation. The complete UBD optimization integration is shown herein with illustrations including flowcharts.