Anxiety disorders are among the most prevalent mental disorders in Germany. Exposure therapy has proven effective in treating anxiety disorders. During exposure therapy, patients are systematically confronted with the feared stimulus or situation. Exposure therapy can be conducted in vivo or in sensu. Recently, a considerable amount of research on virtual reality exposure therapy (VRET) in the treatment of anxiety disorders-especially phobias-has been published. During virtual reality exposure therapy, patients are confronted with a virtual representation of the feared stimulus or situation. There are many studies showing that virtual reality exposure therapy is effective-especially in treating specific phobias. One major advantage of virtual reality exposure therapy is that therapists can easily control the feared object or situation. Furthermore, virtual reality exposure therapy requires less organizational effort and is less time-consuming than exposure therapy in vivo. The principal disadvantage of virtual reality exposure therapy is the danger of cyber sickness. With the development of affordable user-friendly systems, therapists may increasingly use virtual reality exposure therapy to treat patients suffering from anxiety disorders. With respect to the future development of virtual reality exposure therapy, augmented reality seems to be a promising treatment alternative. Future studies need to confirm the efficacy of augmented reality exposure therapy in treating anxiety disorders.