We have developed a massively parallel special-purpose computer system for N-body simulations, GRAPE-4 (GRAvity-PipE 4). The GRAPE-4 system is designed for high-accuracy simulations of dense stellar systems. The GRAPE-4 calculates gravitational forces, their derivatives in time and potential energies. It has a hardware for prediction of positions and velocities, which is used for the individual timestep scheme. We integrated 1692 chips of 640 megaflops performance to achieve the peak speed of 1.08 teraflops.