A laser-designated target simulator for testing laser-guided munitions and in particular the laser-seeking heads thereof. In one embodiment, the simulator includes: (1) a laser light source configured to provide laser light, (2) a waveguide configured to receive the laser light via an end thereof, (3) a baffle structure having a plurality of cavities associated therewith and (4) an actuator coupled to the laser light source and the end and configured to establish a distance therebetween, an intensity of the laser light entering the end being a function of the distance and a number of cavities interposing the laser light source and the end.