The current study explores the effects of interactive versus passive Virtual Reality (VR) distraction on the sense of presence and pain intensity. Sixty-eight healthy students (mean age 21.8, SD = 4.3) underwent two consecutive cold-pressor trials (subject's hand immersed into 6 °C water as long as possible, with a time limit of five minutes), one without VR and another providing a VR distraction “Surreal World.” Participants were randomly assigned to an interactive VR distraction condition, where a number of interactions with the environment were possible, or to a passive VR distraction condition, where they were also exposed to the surreal world, but instead of interacting with the virtual environment, they watched the navigation generated by another participant assigned to the interactive condition. After the VR cold-pressor trial, each subject provided ratings of pain intensity and rated the degree to which they had felt “present” in the virtual environment. Results showed that most of the participants who experienced the interactive VR distraction reported less pain intensity relative to the no-VR trial. However, in the passive VR condition, only 5.9% of participants showed a decreased level of pain intensity relative to the no-VR trial. Also, the amount of presence reported was significantly higher during the interactive VR distraction and correlated negatively with pain intensity scores.