In this study, a rigorous numerical model is developed to simulate the plasma generated in a rarefied, hypersonic shock layer. The model uses the direct simulation Monte Carlo (DSMC) method to treat the particle collisions and the particle-in-cell (PIC) method to simulate the plasma dynamics in a self-consistent manner. The model is applied to compute the flow along the stagnation streamline in front of a blunt body reentering the Earth’s atmosphere at very high velocity. Results from the rigorous DSMC-PIC model are compared directly to the standard DSMC modeling approach that uses the ambipolar diffusion approximation to simulate the plasma dynamics. It is demonstrated that the self-consistent computation of the plasma dynamics using the rigorous DSMC-PIC model captures many physical phenomena not accurately predicted by the standard modeling approach. These computations represent the first assessment of the validity of the ambipolar diffusion approximation when predicting the rarefied plasma generated in a hypersonic shock layer.