Magnetic induction tomography (MIT) is used for reconstructing the changes of the conductivity in a target object using alternating magnetic fields. Applications include, for example, the non-invasive monitoring of oedema in the human brain. A powerful software package has been developed which makes it possible to generate a finite element (FE) model of complex structures and to calculate the eddy currents in the object under investigation. To validate our software a model of a previously published experimental arrangement was generated. The model consists of a coaxial coil system and a conducting sphere which is moved perpendicular to the coil axis (a) in an empty space and (b) in a saline-filled cylindrical tank. The agreement of the measured and simulated data is very good when taking into consideration the systematic measurement errors in case (b). Thus the applicability of the simulation algorithm for two-compartment systems has been demonstrated even in the case of low conductivities and weak contrast. This can be considered an important step towards the solution of the inverse problem of MIT.