Erosion is a form of wear that has been found on the drilling tools used in the oil and gas industry that can, in some cases, severely shorten the life of the tools. In spite of its importance, there has been virtually no attention paid to it in drilling engineering research. This paper focuses on the modelling of erosion and the application of the developed models to improve the design of drilling tools. The mechanism of erosion, which is controlled primarily by the impact velocity and angle, has been formulated based on experimental and theoretical work done in material science. These algorithms were developed for transient simulations of the erosion of any surface in 2D geometry. Based on these, an "Erosion Simulator((1))" has been written, which is able, in combination with any computational fluid dynamics (CFD) software, to simulate erosion in downhole tools. Actual data from TESCO Corporation casing drilling tools((2)) has been used to calibrate the physics of the process and validate the software. The simulator has been used to modify the geometry of the under-reamer casing-drilling tool, which resulted in a substantial decrease in erosion rate and therefore an increase in the tool's life.