Fata Morgana is a specific form of complex superior mirage, mainly formed in high latitude ocean area and also believed to be the credible explanation of sightings of the ‘Flying Dutchman’. In order to obtain the optimal conditions for forming and observing Fata Morgana, two main parameters, the variation of the refractive index gradients and the observation height, are investigated systematically through experimental observations and numerical simulations. By carefully control the diffusion of high-concentration sugar solution, the environment for the formation of multiple-image mirage can be reconstructed in a 60-centimeter tank as the refractive index gradient obtained in sugar solutions is much larger than that appeared in the atmosphere formed by air temperature gradient. To reveal how light propagate in a medium with complex refractive index profile, a green laser is shined into the tank and the light trajectory is recorded by a side camera. The formation of mirage is verified by observing the image of a model boat located at the opposite side of the tank. A ray tracing program is also developed in this study to help to find the optimal experimental conditions and support the experimental observations. Our simulation results show a good agreement with the experimental results indicating our ray propagation theory is valid and the optimal condition to form and observe Fata Morgana is obtained. We found that a larger sugar concentration gradient or larger air temperature gradient will result in a shorter horizontal observation distance. The observer’s position also affects mirage formation in the field of view significantly, indicates that multiple-image mirage can be observed if an observer is located at a specific height and waits for diffusion taking place. The simulation model in this research can be applied to the prediction of refraction result of light propagating through complex mediums. Besides, an efficient method developed in this research for simultaneously measuring the refractive index while proceeding experiment can be applied to the field of adaptive optics for the correction of the wave front distortion of lights propagating through medium with refractive index variations. Those techniques can be beneficial to the researches of astronomy, microscopy, optical vision, and optical communication.   Keywords: Fata Morgana, mirage, Flying Dutchman, refraction, refractive index gradient.