Can virtual reality exposure therapy be used to treat people with social phobia? To answer this question it is vital to know if people will respond to virtual humans (avatars) in a virtual social setting in the same way they would to real humans. If someone is extremely anxious with real people, will they also be anxious when faced with simulated people, despite knowing that the avatars are computer generated? In [17] we described a small pilot study that placed 10 people before a virtual audience. The purpose was to assess the extent to which social anxiety, specifically fear of public speaking, was induced by the virtual audience and the extent of influence of degree of immersion (head mounted display or desktop monitor. The current paper describes a follow up study conducted with 40 subjects and the results clearly show that not only is social anxiety induced by the audience, but the degree of anxiety experienced is directly related to the type of virtual audience feedback the speaker receives. In particular, a hostile negative audience scenario was found to generate strong affect in speakers, regardless of whether or not they normally suffered from fear of public speaking.