Virtual Reality (VR) is more than a fancy technology: it is an advanced tool for assessment and clinical therapy. On one side, it can be described as an advanced form of human-computer interface that allows the user to interact with and become immersed in a computer-generated environment in a naturalistic fashion. On the other side, VR can also be considered as an advanced imaginal system: an experiential form of imagery that is as effective as reality in inducing emotional responses. The chapter outlines the current state of research in this area. In particular, it focuses its analysis both on the concept of "presence" and on the main applications of VR in clinical psychology: anxiety disorders, eating disorders and obesity, pain reduction. The open source "NeuroVR" VR system (http://www.neurovr.org) and its potential clinical applications are also introduced.