Natural resource managers face numerous choices when developing bioassessment programs but seldom have the opportunity to compare the performance of alternative designs. As a result, managers often lack a basis for establishing decision thresholds based on their objectives for evaluating resource condition, accounting for uncertainty, and controlling costs. In this chapter, we illustrate how simulation techniques may be used to optimize bioassessment decision thresholds and sampling designs with a case study of benthic macroinvertebrate communities in Shenandoah National Park, USA. We evaluated the effects of sampling effort (6 levels) and taxonomic resolution (family vs. genus) on the sensitivity of a commonly used index of stream condition (Macroinvertebrate Biotic Integrity Index, MBII) to classify resource condition as affected by ecological change. We computed expected utility values to compare decision thresholds, which integrated statistical power and differential risk tolerance for misclassification (i.e., type I and II error rates). Our analysis revealed important differences among bioassessment designs. MBII sensitivity increased with sampling effort, but improvements were modest across the highest sampling levels. Genus-level assessments were generally most sensitive to ecological change, even though precision increased at the family level due to decreased variation in reference communities. However, the sensitivity-cost relationship revealed no single, optimal combination of taxonomic resolution and sampling effort. Rather, we found that for a given cost, equivalent sensitivities could be obtained from larger samples at the family-level or smaller samples at the genus level. An analysis of expected utility demonstrated that the optimal decision threshold depends on prior probability of resource condition, i.e., reference, early warning, or impaired. We conclude that simulation methods provide a flexible approach to evaluate and optimize bioassessment designs and decision thresholds based on objective-specific utility values.