Surgeons require significant training to acquire sufficient dexterity and hand-eye coordination to manipulate objects skillfully under the microscope. This paper presents a computer-based real-time simulation of microsurgery as well as the hardware setup. It presents a realistic physics-based elastic suture and blood vessel model, fast collision detection techniques, suture insertion process and novel approach of a haptic forceps. The simulation environment demonstrates a complete vascular suturing system to train skills such as grasping, suture placement, needle insertion and knot-tying running at 500 Hz, sufficient for physical realism.