This paper reports on a project carried out at Delft University of Technology, for improvement of daylightíng simulation tools. Earlier work involved the development of SIBE2, a prototype daylight simulation program using new computational concepts for daylighting simulation in order to overcome a number of well known disadvantages of present daylighting simulation tools. This project was concerned with the importance of realistic description of the sky luminance used in the simulation. Methods of representing sky luminance distributions were surveyed, íncluding both currently accepted and alternative methods. From this survey a computer program was developed to provide the sky representation for SIBE2. The model selected for implementation in the computer program. was; developed by Perez et al., and is based on CIE formulae. The work described in this paper illustrates the importance of the sky representation in daylighting simulation. The exploration of accuracy and realism as carried out in the program development recounted here suggests issues for future research in this field.