In this paper, we study the application of propositional decision procedures in hardware verification. In particular, we apply bounded model checking, as introduced in [1], to equivalence and invariant checking. We present several optimizations that reduce the size of generated propositional formulas. In many instances, our SAT-based approach can significantly outperform BDD-based approaches. We observe that SAT-based techniques are particularly efficient in detecting errors in both combinational and sequential designs. 1