To enable a realistic automated manual transmission (AMT) system performance evaluation and rapid prototyping, this paper focuses on constructing a practical Simulink model and a hardware-in-the-loop (HIL) real-time simulation. The working principle and dynamic characteristics of the AMT system are first explored. The driveline, the engine control, and the dry clutch are modelled and analysed. In particular, a dynamic model for the hydraulic clutch actuator that is currently used in the actual transmissions is developed. To evaluate the performance and operation characteristics of the AMT system, the control methodology to ensure desirable performance is studied. The gearshift control logic and the proportional-integral-derivative-based clutch control are analysed and implemented. Based on the dynamic model and the controller, a Simulink model is developed and implemented into an HIL real-time simulator to enable rapid prototyping. In addition, to realize an energy-efficient and smooth clutch engagement, the possibility of using the dynamic programming method to generate the optimal clutch and engine torque control inputs is investigated as well. In particular, the controllability of the AMT system is studied to determine the number of control inputs necessary for optimal control. To this end, the simulation and experiment results in the HIL environment are presented. © Authors 2010.