This paper presents a Matlab/Simulink simulation environment developed at West Virginia University to facilitate the design, testing, and analysis of fault-tolerant control laws for autonomous operation of unmanned aerial vehicles. Custom map generation software allows the user to setup the mission scenario by defining threat zones, obstacles, and points of interest. FlightGear provides vehicle and environment visualization. Maximum portability, flexibility, and extension capability are ensured through a modular structure including libraries of aircraft models, path planning algorithms, and trajectory tracking algorithms. Models for environmental upset conditions and aircraft sub-system failure/damage, including GPS, are implemented allowing the investigation of a variety of abnormal flight conditions. Several adaptive trajectory tracking algorithms with significant fault-tolerant potential are available. A set of comprehensive performance metrics based on tracking errors and control activity are computed and provided to the user for control laws performance analysis and comparison. The versatility and utility of the simulation environment is illustrated through example simulation results at normal and abnormal flight conditions.