This paper describes an algorithm and a simulation methodology for object detection and tracking using a strap-down Image- Infrared (IR) seeker in a guided missile equipped also with a gimbaled radar seeker. A particular system of interest is an interceptor against anti-ship missiles in dual-mode terminal guidance based on information fusion from the two seekers. The simulator is implemented using Virtual Reality (VR) in MATLAB Simulink to visualize the interceptor’s perspective of the engagement situations. The implementation details are as follows. First, the virtual world of simulation is made using VR. Next, Track-Before-Detect algorithm based on a particle filter is used for target detection and tracking. The particle filter in the TBD algorithm is initialized with uniformly-distributed particles while a likelihood function provides weights so that the particles converge close to interim targets. The TBD algorithm allows for simultaneous detection and tracking of the target of interest. Simulations results demonstrate that the proposed method speeds up target detection compared to blob detection and CamShift object tracking.