A block diagram editor system and method is implemented in a computer workstation that includes a Cathode Ray Tube (CRT) and a mouse, graphics and windowing software, and an external communications interface for test instruments. The computer is programmed for constructing, interconnecting and displaying block diagrams of functional elements on the CRT. From prestored routines for each functional element, the software assembles and executes a program that emulates the functional operations of each element and transfers data from output from each element in turn to an input of a succeeding block, as determined by the block diagram configuration. The block functions include signal generating and analysis functions, and functions for control of various types of test instruments, which can be interactively controlled through the CRT and mouse. The computer converts desired outputs of the instruments into control settings and receives, analyzes and displays data from the instruments. Blocks can also be grouped into macroblocks.