Modern superscalar processors rely heavily on speculative execution for performance. For example, our measurements show that on a 6-issue superscalar, 93% of committed instructions for SPECINT95 are speculative. Without speculation, processor resources on such machines would be largely idle. In contrast to superscalars, simultaneous multithreaded (SMT) processors achieve high resource utilization by issuing instructions from multiple threads every cycle. An SMT processor thus has two means of hiding latency: speculation and multithreaded execution. However, these two techniques may conflict; on an SMT processor, wrong-path speculative instructions from one thread may compete with and displace useful instructions from another thread. For this reason, it is important to understand the trade-offs between these two latency-hiding techniques, and to ask whether multithreaded processors should speculate differently than conventional superscalars.This paper evaluates the behavior of instruction speculation on SMT processors using both multiprogrammed (SPECINT and SPECFP) and multithreaded (the Apache Web server) workloads. We measure and analyze the impact of speculation and demonstrate how speculation on an 8-context SMT differs from superscalar speculation. We also examine the effect of speculation-aware fetch and branch prediction policies in the processor. Our results quantify the extent to which (1) speculation is critical to performance on a multithreaded processor because it ensures an ample supply of parallelism to feed the functional units, and (2) SMT actually enhances the effectiveness of speculative execution, compared to a superscalar processor by reducing the impact of branch misprediction. Finally, we quantify the impact of both hardware configuration and workload characteristics on speculation's usefulness and demonstrate that, in nearly all cases, speculation is beneficial to SMT performance.