The real-time pseudo-dynamic sub-structure (SubPSD) test is a new procedure for dynamic testing of structures. Here, the actual test specimen is a part, i.e. sub-structure, of a larger, complex system. The main structure is simulated on a computer which is in interaction with the test rig. One possible application is the qualification test of a payload (sub-structure) mounted in a carrier rocket (computer model). Consideration of the interaction between main- and sub-structure will yield more realistic results than conventional shaking table tests. This can be a good basis for a more effective, light-weight design of the payload. An algorithm is presented, which is based on the Newmark time domain solution of the equation of motion. It uses sub-stepping instead of iteration to reach equilibrium within each time step. This algorithm and a suitable hardware allow for true real-time performance of the SubPSD test, even with oscillatory sub-structures. Numerical studies are presented which demonstrate the accuracy but also the limits of the procedure. Experimental results of a 4 d.o.f. test model are compared to the numerical results.