Traditional simulation systems were capable of providing statistical evaluation of targeted factory design feasibility. But designers cannot experience the actual setting of factory design and simulation. This paper illustrates the implementation of virtual factory layout system in 3D virtual environment. Two key techniques and functionalities are presented and visualized in our system. Based on the model database, designers can select proportionate physical object from database and interactive layout them in virtual factory. Furthermore, we define the logical model and establish the communication between logical models for simulation.