— We present a software infrastructure that embeds physical hosts in a simulated network. Aiming to create a largescale real-time virtual network testbed, our real-time interactive simulation approach combines the advantages of both simulation and emulation, by maintaining flexibility of the simulation models and increasing fidelity as real systems are included in the simulation. In our approach, real-world distributed applications and network services can run together with the real-time simulator; real packets are injected into the simulation and subject to the simulated network conditions computed as a result of both real and virtual traffic competing for network resources. A prototype of the proposed emulation infrastructure has been implemented based on Virtual Private Network (VPN). One distinct advantage of our approach is that it does not require special hardware. Furthermore, it is flexible, secure, and scalable—attributes inherited directly from the VPN implementation....