We present a simulation-based real-time scheduling methodology for a flexible manufacturing system. Developed is a scheduling mechanism in which the job dispatching rule varies dynamically based on information from discrete event simulation that evaluates a set of candidate rules. Major components of the scheduling mechanism are a simulation mechanism and a real-time control system. The simulation mechanism evaluates dispatching rules and selects the best dispatching rule for a given criterion. The real-time control system periodically monitors the shop floor and checks the performance value of the system. The selected dispatching rule is used until the difference between the actual performance value and the value estimated by simulation exceeds a given limit. Then a new simulation is performed with the remaining operations in the simulation mechanism to select a new rule. Results of computational tests show that the scheduling mechanism can be used effectively in real situations because it can fully use the information on the actual state of shop floors.