We discuss early results from the first N-body/hydrodynamical simulation to
resolve the formation of galaxies in a volume large enough for their clust
ering properties to be reliably determined. The simulation follows the form
ation of galaxies by gas cooling within dark halos of mass a few times 10(1
1) M. and above, in a flat cold dark matter universe with a positive cosmol
ogical constant. Over 2200 galaxies form in our simulated volume of (100 Mp
c)(3). Assigning luminosities to the model galaxies using a spectral popula
tion synthesis model results in a K-band luminosity function in excellent a
greement with observations. The two-point correlation function of galaxies
in the simulation evolves very little since z = 3, and it has a shape close
to a power law over 4 orders of magnitude in amplitude. At the present day
, the galaxy correlation function in the simulation is antibiased relative
to the mass on small scales and unbiased on large scales. It provides a rea
sonable match to observations.