Initially designed for the treatment of phobias, the use of virtual reality in phobic disorders has expanded to other mental health disorders such as posttraumatic stress disorder, substance-related disorders, eating disorders, psychosis, and autism spectrum disorder. The goal of this review is to provide an accessible understanding of why this approach is important for future practice, given its potential to provide clinically relevant information associated with the assessment and treatment of people suffering from mental illness. Most of the evidence is available for the use of virtual reality exposure therapy in anxiety disorders and posttraumatic stress disorder. There is hardly any evidence that virtual reality therapy is effective in generalized anxiety disorder and obsessive-compulsive disorder. There is increasing evidence that cue exposure therapy is effective in addiction and eating disorders. Studies into the use of virtual reality therapy in psychosis, autism spectrum disorder, and attention deficit hyperactivity disorder (ADHD) are promising.