Virtual reality (VR) is a technology which allows simulation of a realistic computer-generated environment and user interaction with it. The most common means to present the simulated stimuli is HMD (Head Mounted Display). VR applications in psychiatry have been a focus of research since 1990´s, however, it was a recent development and improved availability of this technology that lead to increased attention to this topic. Applications of VR in psychiatry utilise following attributes: induction of the sense of presence, presentation of any stimuli, manipulation with sensor modalities and measurement of user be-haviour. The key attribute distinguishing VR from other ways of stimuli presentation is the sense of presence which can increase the effect of presented stimuli on the user. The largest body of literature about VR in psychiatry deals with interventions including therapy, rehabilitation, quality of life improvement, prevention and prophylaxis. The most common therapeutical interventions are Cognitive-Behavioral therapy (CBT) techniques implementations, especially Virtual Reality Exposure Therapy (VRET). The second most explored field is an assessment which takes advantage of a possibility to measure user behaviour. VR could be used as a tool for objective and ecologically valid assessment. The third possible use of the VR in psychiatry is the research of mental disorders, their pathophysiology and their relationship to the VR. The last group of applications includes training of mental health professionals and education about mental disorders. Anxiety disorders are the most frequent target of the VR applications, mostly as interventions, usually VRET. A similar situation is in stress-related disorders and addictions. In psychotic disorders, VR is used usually for research. A relatively high number of applications deal with eating disorders, cognitive impairment, autism and atten-tion deficit and hyperactivity disorder. On the other side, VR is used minimally in obsessive-compulsive disorder, affective disorders and personality disorders. Limitations of VR utilisation in psychiatry are not fully explored. The first possible limitation could stem from VR adverse reactions. VR sickness is the most often mentioned adverse reaction. In recent literature, there are how-ever notions about others, for example, "aftereffects" which could be visual or cognitive. It should also be noted that the language of VR as a medium is not fully known. There is a lack of accurate description of relationships between the effects of the VR application, the intensity of the sense of presence and ways of stimuli presentation. The main problem of actual literature on this topic is low methodological quality, possible publication bias and frequent use of waitlist controls. Authors often do not describe technological specifications which are related to reduced hardware and software standardisation. The truth also is that to this date mostly only conceptually simple applications have been explored. It appears that VR could find its place in understanding, diagnostics and therapy of several mental disorders. To reach full potential, this technology still has to mature methodologically and conceptually. Considering the possibilities of the VR in psychiatry and current state of knowledge, VR can be an exciting focus for further research.