A hardware channel emulator is essential for testing hardware receiver systems. The conventional test methodology uses a hardware radio frequency (RF) channel emulator connected between the transmitter and receiver under test. This method requires an RF channel emulator as well as a transmitter, both of which are expensive. In this article a method of hardware channel emulation is introduced whereby a multipath channel, as well as Gaussian noise at the analog front-end of the receiver, are modelled digitally at complex baseband. This approach allows integration of the channel emulator and the modulator into a single hardware structure resulting in a compact circuit that can reside inside the receiver system's digital signal processing (DSP) platform. Such an approach facilitates testing of the receiver's DSP implementation earlier in the development cycle.