The traditional approach used to implement a business process (BP) in today's information systems (IS) no longer covers the actual needs of the dynamically changing business. Therefore, a necessity for a new approach of dynamic business process (DBP) modelling and simulation has arisen. To date, existing approaches to DBP modelling and simulation have been incomplete, i.e. they lack theory or a case study or both. Furthermore, there is no commonly accepted definition of BDP. Current BP modelling tools are suitable almost solely for the modelling and simulation of a static BP that strictly prescribes which activities, and in which sequence, to execute. Usually, a DBP is not defined strictly at the beginning of its execution, and it changes under new conditions at runtime. In our paper, we propose six requirements of DBP and an approach for rule- and context-based DBP modelling and simulation. The approach is based on changing BP rules, BP actions and their sequences at process instance runtime, according to the new business system context. Based on the proposed approach, a reference architecture and prototype of a DBP simulation tool were developed. Modelling and simulation were carried out using this prototype, and the case study shows correspondence to the needs of dynamically changing business, as well as possibilities for modelling and simulating DBP.