As virtual reality (VR) technology and systems become more commercially available and accessible, more and more psychologists are starting to integrate VR as part of their methods. This approach offers major advantages in experimental control, reproducibility, and ecological validity, but also has limitations and hidden pitfalls which may distract the novice user. This study aimed to guide the psychologist into the novel world of VR, reviewing available instrumentation and mapping the landscape of possible systems. We use examples of state‐of‐the‐art research to describe challenges which research is now solving, including embodiment, uncanny valley, simulation sickness, presence, ethics, and experimental design. Finally, we propose that the biggest challenge for the field would be to build a fully interactive virtual human who can pass a VR Turing test – and that this could only be achieved if psychologists, VR technologists, and AI researchers work together.