A machining simulation apparatus is arranged in a machine tool having a tool holding mechanism, a workpiece holding mechanism, a drive mechanism and a numerical controller, and provided with: an actual CCD camera for imaging a tool held by the tool holding mechanism and the workpiece holding mechanism not holding a workpiece to generate actual image data; a model data update processing section for generating model data relating to when moving the holding mechanisms based on the operation command received from the numerical controller and the model data of the holding mechanisms, tool and workpiece; a virtual image generation processing section for generating virtual image data of the tool and workpiece based on the generated model data; and a rendering processing section for generating composite image data by superimposing the virtual image on the actual image, and displaying the composite image data on a screen display device.