The 'simulation' theory of thinking rests on three assumptions about brain function. First, behaviour can be simulated by activation of motor mechanisms as during overt actions, but while suppressing its execution. Second, perception can be simulated by internal activation of sensory mechanisms as during normal perception of external stimuli. Third, both overt and covert actions can elicit perceptual simulation of their probable consequences. A large body of evidence supports these assumptions. It is argued that the simulation mechanism automatically gives rise to (and thus explains) many of the phenomena that characterise our inner world and consciousness.