Virtual reality (VR) refers to an advanced technological communication interface in which the user is actively participating in a computer-generated 3-dimensional virtual world that includes computer sensory input devices used to simulate real-world interactive experiences. VR has been used within psychiatric treatment for anxiety disorders, particularly specific phobias and post-traumatic stress disorder, given several advantages that VR provides for use within treatment for these disorders. Exposure therapy for anxiety disorder is grounded in fear-conditioning models, in which extinction learning involves the process through which conditioned fear responses decrease or are inhibited. The present review will provide an overview of extinction training and anxiety disorder treatment, advantages for using VR within extinction training, a review of the literature regarding the effectiveness of VR within exposure therapy for specific phobias and post-traumatic stress disorder, and limitations and future directions of the extant empirical literature.