Virtual reality (VR) has recently emerged as a potentially effective way to provide general and specialty health care services, and appears poised to enter mainstream psychotherapy delivery. Because VR could be part of the future of clinical psychology, it is critical to all psychotherapists that it be defined broadly. To ensure appropriate development of VR applications, clinicians must have a clear understanding of the opportunities and challenges it will provide in professional practice. This review outlines the current state of clinical research relevant to the development of virtual environments for use in psychotherapy. In particular, the paper focuses its analysis on both actual applications of VR in clinical psychology and how different clinical perspectives can use this approach to improve the process of therapeutic change.