The chapter provides a brief overview of the historical development of the digital twin and explains related terms. The first focus is the consideration of digital twins as simulation-based, executable models. These can be used in the development of mechatronic systems and in the form of software solutions for various tasks in operation and service. Based on expected future requirements for mechatronic systems, a digital twin methodology is presented to support those involved in developing mechatronic systems and applications for their use. To this end, an extended concept is presented on how the digital twin should be developed over the life cycle of the mechatronic system. The use of digital twins in linking different value chains is also described.