HLA uses an implicit Runtime Infrastructure (RTI) that completely encapsulates all simulation systems. This implementation on a networked virtual environment might be limited and could affect the overall system performance. The performance of HLA on PC workstations in a networked virtual environment might not be determined, and therefore the effects and limitations of its implementation could severely hamper the realism of real-time virtual environments. The goal of this thesis is to determine me limitations of the High Level Architecture (HLA) in a networked virtual environment on the Windows NT platform. In identifying the limitations of HLA, we will be able to ascertain the areas in which HLA can be improved. This thesis implements and measures the system performance of three different setups, namely a standalone virtual environment, a networked virtual environment using HLA, and a networked virtual environment using User Datagram Protocol (UDP). The system performance measured includes average CPU, network, graphics and memory processing requirements, frame rate per second, and the reliability of data received. The results indicate the use of heavily threaded processes by HLA significantly reduces overall system performance.