Virtual reality exposure therapy (VRET) is based on the assumption that anxiety subsides through a process of habituation after a person has been exposed to a fearful situation for a prolonged period of time. During VRET, patients are exposed to an anxiety‐provoking stimulus via a headmounted display (HMD), which is connected to a computer system that generates real‐time 3D images. An alternative way to offer VRET is via a computer‐animated virtual environment (CAVE), a projection‐based virtual reality system. Recent research shows temporal synchronicity in therapeutic processes involved in VRET and exposure in vivo. This chapter discusses the therapy outcome in VRET as well as the therapeutic processes involved. It discusses three studies that show that VRET, in combination with cognitive‐behavioral therapy (CBT) or as stand‐alone treatment, is an efficacious treatment for panic disorder with or without agoraphobia. VRET offers an excellent opportunity to do standardized research into therapy processes.