Behavioral therapy techniques for treating phobias often includes graded exposure of the patient to anxiety-producing stimuli (Systematic Desensitization). However, in utilizing systematic desensitization, research reviews demonstrate that many patients appear to have difficulty in applying imaginative techniques. This chapter describes the Virtual Reality Therapy (VRT), a new therapeutical approach that can be used to overcome some of the difficulties inherent in the traditional treatment of phobias. VRT, like current imaginal and in vivo modalities, can generate stimuli that could be utilized in desensitization therapy. Like systematic desensitization therapy, VRT can provide stimuli for patients who have difficulty in imagining scenes and/or are too phobic to experience real situations. As far as we know, the idea of using virtual reality technology to combat psychological disorders was first conceived within the Human-Computer Interaction Group at Clark Atlanta University in November 1992. Since then, we have successfully conducted the first known pilot experiments in the use of virtual reality technologies in the treatment of specific phobias: fear of flying, fear of heights, fear of being in certain situations (such as a dark barn, an enclosed bridge over a river, and in the presence of an animal [a black cat] in a dark room), and fear of public speaking. The results of these experiments are described.