This paper describes the development of a virtual prototype of a log forwarder using ADAMS dynamic system simulation software. The mechanics, hydraulics, hydrostatic propelling system with control system, tire-road-interaction and system interaction was modeled by using ADAMS. Also the flexibility of the boom mechanism was modeled. The virtual model was then verified with several different tests on actual hardware.This investigation concentrated on the simulation of forwarder dynamics, particularly in situations when the forwarder was moving. Firstly the virtual model performed a maneuver, in which the forwarder drove over small bump on the road at different speeds and loads. The same test was then performed with an actual forwarder, instrumented with acceleration sensors, placed on the bogie axles and a tachometer mounted on the propeller shaft to measure shaft rotational speed. Relatively good correspondence between measured and simulated results was achieved.The validated virtual model was used in the design development of different alternative structural and mechanical improvements were evaluated. For example, function of different rotation restrictors between front- and rear chassis were tested.