Immersive virtual environment (IVE) technology has great promise as a tool for basic experimental research in psychology. IVE technology gives participants the experience of being surrounded by the computer-synthesized environment. We begin with a discussion of the various devices needed to implement immersive virtual environments, including object manipulation and social interaction. We review the benefits and drawbacks associated with virtual environment technology, in comparison with more conventional ways of doing basic experimental research. We then consider a variety of examples of research using IVE technology in the areas of perception, spatial cognition, and social interaction.