The 1964 novel is the story of a virtual city for marketing research, developed to reduce the need for opinion polls. The computer-generated city simulation contains inhabitants with their own consciousness but for the most part unaware that they are made up of nothing but electric impulses in a computer. The only virtual person aware of his nature is driven almost mad by this knowledge. After the simulator’s lead scientist dies mysteriously and a co-worker vanishes, the protagonist, Douglas Hall, becomes responsible for the simulator and witnesses ever more strange events like vanishing people and missing landscape in his own 'real' world which leave him with only two possible interpretations: either he is fast becoming mad or himself living in a higher order simulator with the real 'real world' a third tier of reality. The title "Simulacron-3" refers to these three levels while "simulacron" is a derivative of simulacrum: a superficial image representing, in this case, a non-existent original.
The novel is the basis both for Rainer Werner Fassbinder's 1973 film 'Welt am Draht' and the 1999 movie 'The Thirteenth Floor', directed by Josef Rusnak.