We describe the first co-design technique aimed at heterogeneous systems employing arbitrated communication. Arbitrated system design is especially difficult because communication scheduling is directly tied to task allocation. The method provides a complete co-design-i.e. generation of a hardware configuration along with an allocation and schedule-for the execution of hard real-time data-dependent tasks. By using an actual scheduling analysis in the inner co-design loop, the method is readily able to address realistic system effects including various communication models like arbitration, as in PCI-based systems.