Artificial intelligence (AI) is transforming medical education and healthcare simulation (HCS), offering new opportunities for training and assessment. AI's integration into HCS is particularly significant due to its deep connection with computer technology, enabling rapid scalability and practical testing of AI applications. This integration enhances AI literacy among healthcare professionals, supports interprofessional education, and improves diagnostic accuracy, communication, and patient outcomes. However, challenges such as bias, hallucinations, and the uncertainty of emergent properties may affect healthcare professionals' trust in AI systems. Despite these challenges, AI is expected to increase the use of virtual reality platforms, enabling 24/7 self-directed learning and personalized evaluations. The review highlights AI's impact on simulated patients, team skills, procedural training, and clinical curriculum alignment. It also discusses the potential of AI in creating virtual patients, virtual instructors, and intelligent tutoring systems, which can enhance learning and training. AI-driven games and gamification are also being explored to improve engagement and motivation. The review emphasizes the importance of AI in surgical simulation, where it can provide real-time feedback and improve procedural skills. AI is also being used to assess surgical proficiency and mentorship, with potential applications in robotic surgery. The review concludes that AI has the potential to revolutionize medical education and healthcare simulation, but careful consideration of its ethical and practical implications is necessary.Artificial intelligence (AI) is transforming medical education and healthcare simulation (HCS), offering new opportunities for training and assessment. AI's integration into HCS is particularly significant due to its deep connection with computer technology, enabling rapid scalability and practical testing of AI applications. This integration enhances AI literacy among healthcare professionals, supports interprofessional education, and improves diagnostic accuracy, communication, and patient outcomes. However, challenges such as bias, hallucinations, and the uncertainty of emergent properties may affect healthcare professionals' trust in AI systems. Despite these challenges, AI is expected to increase the use of virtual reality platforms, enabling 24/7 self-directed learning and personalized evaluations. The review highlights AI's impact on simulated patients, team skills, procedural training, and clinical curriculum alignment. It also discusses the potential of AI in creating virtual patients, virtual instructors, and intelligent tutoring systems, which can enhance learning and training. AI-driven games and gamification are also being explored to improve engagement and motivation. The review emphasizes the importance of AI in surgical simulation, where it can provide real-time feedback and improve procedural skills. AI is also being used to assess surgical proficiency and mentorship, with potential applications in robotic surgery. The review concludes that AI has the potential to revolutionize medical education and healthcare simulation, but careful consideration of its ethical and practical implications is necessary.