As design complexity increases, functional verification becomes a crucial issue to ensure design correctness at an early design stage. Traditional methods for verifying functional designs are based on the HDL simulation, which is becoming the bottleneck of the design cycle because of the increasing design complexity. The accurate verification ability at the architectural level through a large set of the test programs and real world applications is a foundation for the next design step. In this paper, we describe how to verify a functional model on a real target system. The proposed methodology called virtual chip makes it possible not only to check the functional correctness on real systems, but also to explore design space by measuring the performance effectiveness of various architecture parameters under real applications. Experimental results show that functional models can be verified on real systems using complicated application programs. The proposed functional verification method is faster than HDL simulation and even comparable to emulation.