► Extensive simulations for the design and optimization of CTA were carried out. ► Different sets of simulation tools were checked against each other. ► Large-scale simulations with 275 telescopes for later layout selection.► Different analysis methods were applied and compared. ► Resulting sensitivity predictions confirmed the goals of CTA. The Cherenkov Telescopes Array (CTA) is planned as the future instrument for very-high-energy (VHE) gamma-ray astronomy with a wide energy range of four orders of magnitude and an improvement in sensitivity compared to current instruments of about an order of magnitude. Monte Carlo simulations are a crucial tool in the design of CTA. The ultimate goal of these simulations is to find the most cost-effective solution for given physics goals and thus sensitivity goals or to find, for a given cost, the solution best suited for different types of targets with CTA. Apart from uncertain component cost estimates, the main problem in this procedure is the dependence on a huge number of configuration parameters, both in specifications of individual telescope types and in the array layout. This is addressed by simulation of a huge array intended as a superset of many different realistic array layouts, and also by simulation of array subsets for different telescope parameters. Different analysis methods – in use with current installations and extended (or developed specifically) for CTA – are applied to the simulated data sets for deriving the expected sensitivity of CTA. In this paper we describe the current status of this iterative approach to optimize the CTA design and layout.