The Pharmpy Automatic Model Development (AMD) tool automates the building of population pharmacokinetic (popPK) models by utilizing a systematic stepwise process. In this study, the performance of the AMD tool was assessed using simulated datasets. Ten true models mimicking classical popPK models were created. From each true model, dataset replicates were simulated assuming a typical phase I study design—single and multiple ascending doses with/without dichotomous food effect, with rich PK sampling. For every dataset replicate, the AMD tool automatically built an AMD model utilizing NONMEM for parameter estimation. The AMD models were compared to the true and reference models (true model fitted to simulated datasets) based on their model components, predicted population and individual secondary PK parameters (SP) (AUC0-24, cmax, ctrough), and model quality metrics (e.g., model convergence, parameter relative standard errors (RSEs), Bayesian Information Criterion (BIC)). The models selected by the AMD tool closely resembled the true models, particularly in terms of distribution and elimination, although differences were observed in absorption and inter-individual variability components. Bias associated with the derived SP was low. In general, discrepancies between AMD and true SP were also observed for reference models and therefore were attributed to the inherent stochasticity in simulations. In summary, the AMD tool was found to be a valuable asset in automating repetitive modeling tasks, yielding reliable PK models in the scenarios assessed. This tool has the potential to save time during early clinical drug development that can be invested in more complex modeling activities within model-informed drug development.