Virtual environments (VE's) let users navigate and interact with computer-generated three-dimensional (3-D) environments in real time, allowing for the control of complex stimuli presentation. These VE's have attracted much attention in medicine, especially in remote or augmented surgery, and surgical training, which are critically dependent on hand-eye coordination. Recently, however, some research projects have begun to test the possibility of using VE's for the study and rehabilitation of human cognitive and functional activities. This paper highlights recent and ongoing research related to the applications of VE's in the neuroscience arena. In particular, it focuses on the American and European initiatives in this field, including a description of the European Commission (EC)-funded VREPAR projects. Finally, the paper provides a general introduction to virtual reality (VR), as it relates to its impact on cognitive and functional abilities.