Hardware-in-the-loop (HIL) simulation is a technique that is being used increasingly in the development and test of complex systems. Real-world testing of an intricate system in a field-like power plant can be challenging, time-consuming, expensive, and hazardous. HIL emulators allow engineers to test devices thoroughly and efficiently in a virtual environment with high reliability and minimum risk of defect. In this paper, the complete electric power system (including generator, turbine-governor, excitation system, transmission lines, transformer, external grid and related loads) is implemented in a MATLAB/Simulink environment. Different virtual instrument pages are modeled in the graphical programming language of LabVIEW which enable fast and reliable measurement functions such as data acquisition, archiving, real-time graphical display and processing. The interaction between MATLAB and LabVIEW is accomplished by generating a Pharlap ETS Targets ^* .dll file which enables the two software to exchange real-time data. Also, a real 1518-kW excitation system is considered as a test case for the introduced HIL system. This equipment is connected to LabVIEW software through a National Instrument PXI technology. Different scenarios (electrical frequency/active power change, voltage step response, etc.) are simulated in the designed power system emulator (PSE). The validity of the implemented model for the excitation system is verified by finding good matching between MATLAB and HIL simulation results.