In a math-based control algorithm design, model-based simulation and testing are very important as an integral part of design process. There are many advantages of using modeling and simulation in the algorithm design. In this paper, Algorithm-in-the-Loop and Hardware-in-the-Loop approaches are adopted for a transmission control algorithm development. A practical approach is introduced on how to test the control algorithms with a reliable plant (virtual engine, transmission, and vehicle) model in the closed-loop simulation. In using combination of open-loop and closed-loop simulations, various key behavior test cases are developed and documented for the success of control algorithms development. Secondly, the same test cases are reused and verified against the production codes, which are automatically generated from the math-based control algorithm models. Finally, the same key-behavior test cases are repeated and verified on the Hardware-in-the-Loop bench after the production software and controller are integrated and released. Examples will be given to illustrate the effectiveness of this control algorithm design approach over a wide range of test conditions and scenarios.