In recent decades, a growing body of literature has focused on emotion regulation (ER), which refers to the ability to implement strategies in order to modulate emotional responses and reach desirable goals. To date, impaired ER (i.e., emotion dysregulation) has been identified as a transdiagnostic factor across a wide range of psychopathological conditions, which shows the importance of improving patients' ability to regulate negative and positive emotions in clinical practice. In addition to the increasing evidence showing its efficacy in the treatment of several clinical conditions, virtual reality (VR) has recently emerged as a potentially powerful tool for enhancing ER, thus breaking new ground in the development of cutting-edge transdiagnostic interventions. In the present narrative review, we will provide an overview of the existing evidence about VR-based interventions in the field of ER, emphasizing the promising findings and the barriers that still have to be addressed. To this aim, the available VR-based literature will be analysed in relation to four categories of ER strategies: situational strategies, attentional strategies, cognitive strategies, and response modulation strategies. Furthermore, new emerging fields of research targeting innovative aspects of ER will be highlighted, including the use of VR to promote positive emotions and interpersonal ER skills. Besides, its cost-effectiveness will be discussed, taking into account the costs for both developers (e.g., clinicians and researchers) and end-users. Finally, future directions in this promising field of research will be outlined.