The time delays in the system loop lead to HIL (hardware-in-the-loop) simulation error and even system instability. In this chapter, a distributed delay compensation approach is proposed for the HIL simulation system. The force measurement delay, numerical calculation delay, dynamic response delay of the lower motion simulator and structural deformation dynamics of the lower motion simulator in the system loop are compensated in situ. Compared with lumped compensation, distributed compensation has stronger robustness to the signal noise and better adaptability to the varying contact natural frequency. Simulations and experiments show that the proposed compensation approach can guarantee the system stability and simulation accuracy.