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Abstract: We present results of Monte Carlo simulations for the High Altitude Gamma Ray (HAGAR) telescope array which detects very high energy gamma rays from astronomical sources. This telescope array, located at Hanle at an altitude of 4270m in the Ladakh region of the Himalayas in India, is the highest altitude atmospheric Cherenkov experiment in the world. Taking advantage of the high altitude, this experiment could achieve relatively low energy threshold with a modest mirror area coverage. To understand the performance parameters of this telescope system, we have simulated large samples of extensive air showers initiated by gamma rays and various species of cosmic rays, using the CORSIKA package. Cherenkov photons produced in the atmosphere are sampled at ground level. These photons are then passed through the detector simulation program, which takes into account various design details and the data acquisition system of HAGAR. Night sky photons are also considered in the detector simulation program as performance of the telescope depends strongly on the level of night sky background (NSB) at the observation site. We have estimated various performance parameters like energy threshold and effective area for vertically incident showers as well as inclined showers. Details of these parameters, results obtained from simulations and comparison with the observed data are presented. It is shown that the energy threshold of the HAGAR telescope system is about 208GeV, a factor of ∼4 less than for a similar set up at about 1000m altitude, and it is able to detect Crab like sources at significance in 17h of observation without imposing additional criteria, like gamma-hadron separation, for further rejection of cosmic rays. [Copyright &y& Elsevier]