Traditional treatment of phobias involves a process of gradual exposure to the feared object. Virtual Reality (VR) environments have been used to effectively treat phobias by simulating feared situations, yet these initial studies have been performed by comparing the effect to no-treatment conditions. We are in the process of comparing VR exposure treatment to “gold-standard” in-vivo exposure treatment by replicating an actual in-vivo exposure area in a VR model. The process of controlling for differences between the two environments highlights a general procedure of selecting elements in virtual environment design, targeted towards producing particular emotional effects. It also raises questions about the necessity for highly realistic simulation in VR phobia treatment.