Posttraumatic Stress Disorder (PTSD) is a chronic, debilitating, psychological condition that occurs in a subset of individuals who experience or witness life-threatening traumatic events. This chapter describes the underlying theoretical foundations and existing research on virtual reality exposure therapy (VRE), a recently emerging treatment for PTSD. Three virtual reality scenarios used to treat PTSD in combat veterans and survivors of terrorism – Virtual Vietnam, Virtual Iraq, and BusWorld – are presented, along with a case study of an individual treated using BusWorld. The future of VRE and its potential for use with telemedicine and the Internet for treatment of PTSD are also discussed.