Anxiety disorders, including phobias and post-traumatic stress disorder, are common and disabling disorders that often involve avoidance behavior. Cognitive-behavioral treatments, specifically imaginal and in vivo forms of exposure therapy, have been accepted and successful forms of treatment for these disorders. Virtual reality exposure therapy, an alternative to more traditional exposure-based therapies, involves immersion in a computer-generated virtual environment that minimizes avoidance and facilitates emotional processing. In this article, we review evidence on the application of virtual reality exposure therapy to the treatment of specific phobias and post-traumatic stress disorder and discuss its advantages and cautions.