Traffic simulation is essential for autonomous vehicle (AV) development, enabling comprehensive safety evaluation across diverse driving conditions. However, traditional rule-based simulators struggle to capture complex human interactions, while data-driven approaches often fail to maintain long-term behavioral realism or generate diverse safety-critical events. To address these challenges, we propose TeraSim, an open-source, high-fidelity traffic simulation platform designed to uncover unknown unsafe events and efficiently estimate AV statistical performance metrics, such as crash rates. TeraSim is designed for seamless integration with third-party physics simulators and standalone AV stacks, to construct a complete AV simulation system. Experimental results demonstrate its effectiveness in generating diverse safety-critical events involving both static and dynamic agents, identifying hidden deficiencies in AV systems, and enabling statistical performance evaluation. These findings highlight TeraSim's potential as a practical tool for AV safety assessment, benefiting researchers, developers, and policymakers. The code is available at https://github.com/mcity/TeraSim.