Recent advances in microfabrication techniques, sensing methods, and miniaturization have enabled automated analysis of samples using microfluidic systems. Each unique application requires successful custom development of integrated lab-on-a-chip devices. This involves design, analysis and characterization of individual components, (pumps, valves, mixers, separators, sensors) and the integrated system. In this regard, first-principle-based simulations of the underlying complex multiphysics phenomena can provide detailed understanding of device function. An overview of modeling and simulation-based analysis for the design and development of microfluidic devices is presented. In particular, the authors highlight some key factors affecting the performance of lab-on-a-chip systems such as surface tension effects, analyte dispersion, Joule heating, and mass transport limitations, and delineate the parameters that influence them. The limitations of these modeling techniques and future needs are discussed.