This paper is devoted to the modelling and simulation of a prototype micro magnetic bearing system. A dynamic model for the system is developed and used in simulation for investigating effects of key design parameters. A number of important nonlinearities and dynamics that are usually ignored in simplified linear analysis but are important in the micro bearing system, have been included in the model. Extensive simulation have been carried out, providing valuable information for designing the actuators and control systems. Some testing results of the protoype micro magnetic bearings are also included in the paper.