It is a popular belief that colours impact one's psychological and affective functioning. However, clear-cut scientific evidence is still lacking, largely due to methodological challenges. Virtual reality (VR) enabled us to control and modify the environment. We exposed 60 participants to red or blue environments varying in lightness and saturation. We assessed participants' physiological responses (i.e. arousal) with heart rate and skin conductance measures, and their self-reported levels of valence and arousal in response to the coloured environments. The results revealed physiological effects of lightness and hue. When compared with the baseline measures, heart rate increased, and heart rate variability decreased more in the dark than the medium lightness rooms. Both measures signalled higher arousal in the darker room, irrespective of hue. Also, when compared with the baseline measures, skin conductance increased more in the red than the blue rooms, again signalling higher arousal in the red condition. The difference between the red and the blue conditions was detectable only on some saturation and lightness combinations. We conclude that being immersed in environments of different colours can change physiological arousal. However, not all changes are driven by hue and not all the effects are measurable on all physiological parameters.