diff --git a/.changelog/unreleased/improvements/1249-update-modelator.md b/.changelog/unreleased/improvements/1249-update-modelator.md
new file mode 100644
index 0000000000..7912ece5fd
--- /dev/null
+++ b/.changelog/unreleased/improvements/1249-update-modelator.md
@@ -0,0 +1,3 @@
+- Update Modelator to 0.2.0 ([#1249])
+
+[#1249]: https://github.com/informalsystems/ibc-rs/pull/1249
diff --git a/Cargo.lock b/Cargo.lock
index add8c920d0..899da78200 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -1728,16 +1728,21 @@ dependencies = [
 
 [[package]]
 name = "modelator"
-version = "0.1.0"
-source = "git+https://github.com/informalsystems/modelator?rev=99f656fa8b3cf46a2aa0b6513e4e140d1778c4bd#99f656fa8b3cf46a2aa0b6513e4e140d1778c4bd"
+version = "0.2.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "8ab4fd1c35db4a1c20a729d779b04d7d3f02a0091cec676d0f95755427a91a2e"
 dependencies = [
  "clap",
+ "hex",
  "nom",
  "serde",
  "serde_json",
+ "sha2",
+ "tempfile",
  "thiserror",
  "tracing",
  "tracing-subscriber 0.2.19",
+ "ureq",
 ]
 
 [[package]]
@@ -3610,6 +3615,22 @@ version = "0.7.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "a156c684c91ea7d62626509bce3cb4e1d9ed5c4d978f7b4352658f96a4c26b4a"
 
+[[package]]
+name = "ureq"
+version = "2.1.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "2475a6781e9bc546e7b64f4013d2f4032c8c6a40fcffd7c6f4ee734a890972ab"
+dependencies = [
+ "base64",
+ "chunked_transfer",
+ "log",
+ "once_cell",
+ "rustls",
+ "url",
+ "webpki",
+ "webpki-roots",
+]
+
 [[package]]
 name = "url"
 version = "2.2.2"
diff --git a/modules/Cargo.toml b/modules/Cargo.toml
index 2e534eee97..39e986709d 100644
--- a/modules/Cargo.toml
+++ b/modules/Cargo.toml
@@ -56,7 +56,7 @@ optional = true
 env_logger = "0.9.0"
 tracing-subscriber = "0.2.19"
 test-env-log = { version = "0.2.7", features = ["trace"] }
-modelator = { git = "https://github.com/informalsystems/modelator", rev = "99f656fa8b3cf46a2aa0b6513e4e140d1778c4bd" }
+modelator = "0.2.0"
 tendermint-rpc = { version = "=0.21.0", features = ["http-client", "websocket-client"] }
 tendermint-testgen = { version = "=0.21.0" } # Needed for generating (synthetic) light blocks.
 sha2 = { version = "0.9.3" }
diff --git a/modules/tests/mbt.rs b/modules/tests/mbt.rs
index 97903618f7..4165aa02f5 100644
--- a/modules/tests/mbt.rs
+++ b/modules/tests/mbt.rs
@@ -1,7 +1,7 @@
 mod runner;
 
-use modelator::{run, TestError};
-use runner::{step::Step, IbcTestRunner};
+use modelator::{run_tla_steps, ModelChecker, TestError};
+use runner::IbcTestRunner;
 
 #[test]
 fn mbt() {
@@ -12,12 +12,14 @@ fn mbt() {
     }
 }
 
-fn run_tests() -> Result<(), TestError<IbcTestRunner, Step>> {
+fn run_tests() -> Result<(), TestError> {
     // run the test
     let tla_tests_file = "tests/support/model_based/IBCTests.tla";
     let tla_config_file = "tests/support/model_based/IBCTests.cfg";
-    let runner = IbcTestRunner::new();
-    run(tla_tests_file, tla_config_file, runner)?;
+    let mut opts = modelator::Options::default();
+    opts.model_checker_options.model_checker = ModelChecker::Tlc;
+    let mut runner = IbcTestRunner::new();
+    run_tla_steps(tla_tests_file, tla_config_file, &opts, &mut runner)?;
 
     Ok(())
 }
diff --git a/modules/tests/runner/mod.rs b/modules/tests/runner/mod.rs
index 0571b8807f..798abd8459 100644
--- a/modules/tests/runner/mod.rs
+++ b/modules/tests/runner/mod.rs
@@ -52,7 +52,6 @@ impl IbcTestRunner {
     }
 
     /// Create a `MockContext` for a given `chain_id`.
-    /// Panic if a context for `chain_id` already exists.
     pub fn init_chain_context(&mut self, chain_id: String, initial_height: u64) {
         let chain_id = Self::chain_id(chain_id);
         // never GC blocks
@@ -63,7 +62,7 @@ impl IbcTestRunner {
             max_history_size,
             Height::new(Self::revision(), initial_height),
         );
-        assert!(self.contexts.insert(chain_id, ctx).is_none());
+        self.contexts.insert(chain_id, ctx);
     }
 
     /// Returns a reference to the `MockContext` of a given `chain_id`.
@@ -436,8 +435,8 @@ impl IbcTestRunner {
     }
 }
 
-impl modelator::runner::TestRunner<Step> for IbcTestRunner {
-    fn initial_step(&mut self, step: Step) -> bool {
+impl modelator::step_runner::StepRunner<Step> for IbcTestRunner {
+    fn initial_step(&mut self, step: Step) -> Result<(), String> {
         assert_eq!(step.action, Action::None, "unexpected action type");
         assert_eq!(
             step.action_outcome,
@@ -448,10 +447,10 @@ impl modelator::runner::TestRunner<Step> for IbcTestRunner {
         for (chain_id, chain) in step.chains {
             self.init_chain_context(chain_id, chain.height);
         }
-        true
+        Ok(())
     }
 
-    fn next_step(&mut self, step: Step) -> bool {
+    fn next_step(&mut self, step: Step) -> Result<(), String> {
         let result = self.apply(step.action);
         let outcome_matches = match step.action_outcome {
             ActionOutcome::None => panic!("unexpected action outcome"),
@@ -499,6 +498,10 @@ impl modelator::runner::TestRunner<Step> for IbcTestRunner {
             ActionOutcome::Ics03ConnectionOpenConfirmOk => result.is_ok(),
         };
         // also check the state of chains
-        outcome_matches && self.validate_chains() && self.check_chain_states(step.chains)
+        if outcome_matches && self.validate_chains() && self.check_chain_states(step.chains) {
+            Ok(())
+        } else {
+            Err("next_step did not conclude successfully".into())
+        }
     }
 }