UNITED STATES

| (Mark      One)            |                                                                                                                                                           |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| [ X ]                      | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934For      the fiscal year ended December 31, 2008                  |
|                       |  OR                                                                                                                                                       |
| [    ] | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d)OF      THE SECURITIES EXCHANGE ACT OF 1934For      the transition period from   to      ____  |

|   | GSE      Systems, Inc.                                      |   |
|--------|-------------------------------------------------------------|--------|
|   | (Exact      name of registrant as specified in its charter) |   |

| Delaware                                            |   | 52-1868008                                         |
|-----------------------------------------------------|--------|----------------------------------------------------|
| (State      of incorporation)                       |   | (I.R.S.      Employer Identification Number)  |
| 1332      Londontown Blvd, Suite 200, Sykesville MD |   | 21784                                              |
| (Address      of principal executive offices)       |   | (Zip      Code)                               |

| Title      of each class                |   | Name      of each exchange on which registered |
|-----------------------------------------|--------|------------------------------------------------|
|  Common      Stock, $.01 par value |   |  American      Stock Exchange             |

| Large      accelerated filer  [  ] | Accelerated      filer  [ X ] | Non-accelerated      filer [ ]                     | Smaller      reporting company [ ] |
|--------------------------------------------------------|-----------------------------------------|----------------------------------------------------|------------------------------------|
|                                                   |                                    | (Do      not check if a smaller reporting company) |                               |

----

| PART      IV  |                                             |    |
|---------------|--------------------------------------------------|---------|
| Item      15. | Exhibits      and Financial Statement Schedules. | 3       |
|          |  SIGNATURES                                 |  3 |
|          |  Exhibits      Index                   |  4 |

----

| ITEM      15. | EXHIBITS AND FINANCIAL      STATEMENT SCHEDULES |
|---------------|-------------------------------------------------|

| (a)   | (2)  List      of Schedules |
|-----------------|---------------------------------------|

|   |   |   | GSE      Systems, Inc.  |
|--------|--------|--------|------------------------------|
|   |   |   | By:                          |        /s/      John V. Moran |
|   |   |   |                         |  John      V. Moran |
|   |   |   |                         | Chief      Executive Officer |
|   |   |   |                         |   |
|   |   |   |        By:              |  /s/      Jeffery G. Hough |
|   |   |   |                         |  Jeffery      G. Hough |
|   |   |   |                         |  Sr.      Vice President & Chief FinancialOfficer |

----

|  Exhibit    |  Description      of Exhibit                                                                                             |
|------------------|------------------------------------------------------------------------------------------------------------------------------------|
| 23.              | Consents      of Experts and Counsel                                                                                               |
|             |                                                                                                                               |
| 23.1             | Consent      of KPMG LLP, filed herewith.                                                                                     |
|        23.2 |         Consent of Deloitte & Touche (M.E.), filed herewith.                                                         |
|             |                                                                                                                               |
| 31.              |  Certifications                                                                                                               |
|             |                                                                                                                               |
| 31.1             | Certification      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002, filed herewith.      |
|             |                                                                                                                               |
| 31.2             | Certification      of Chief Financial Officer Pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002, filed herewith. |
|             |                                                                                                                               |
| 32.              | Section      1350 Certifications                                                                                                   |
|             |                                                                                                                               |

| 32.1            | Certification      of Chief Executive Officer and Chief Financial Officer of the Company      pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002, file herewith.  |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        99. |          Additional Exhibits                                                                                                                                                                                      |
|  99.1      |          Emirates Simulation Academy L.L.C. reports and financial statements for      the year ended 31 December 2008, filed herewith.                                                                            |
|            |                                                                                                                                                                                                                             |