Virtual Environments allow a human to interact with a (computer) system in such a way that a high level of presence in a computer-synthesised world is experienced. In principle, all human senses are involved with the interaction. Many applications may benefit from this type of human-machine interfacing, however, few have emerged so far for medicine. In this paper we elaborate on some realistic potential applications of Virtual Environment technology in the field of medicine. These applications can be found in education/training, therapy, surgery, rehabilitation, diagnosis, telemedicine and biomechanics. The value to be added to these applications by VE technology lies in the fact that patient data or patient models may be moderated to the physician in a more intuitive and natural manner. Despite these potentials, the short-term feasibility of these applications can be put into question for various reasons. Firstly, the current generation of display devices have a resolution that may show to be too low to achieve a sufficiently high degree of realism for medical applications. Secondly, there are no commercially-available actuators for tactile and force feedback which the physician desperately need for the simulation of the contact with the (virtual) patient. Thirdly, the enormous computing power required for these applications (still) needs a considerable investment. With these limitations in mind, we believe that we are at the cradle of a whole new generation of VE applications in medicine.