Virtual reality (VR) is a new and exciting technology which shows great potential and promise in fields such as entertainment, health, education, business, public safety, and the military sectors. The highly immersive quality of VR promises the ability to safely and authentically simulate “real world” situations in a controlled environment. However, it’s appropriateness for use in psychotherapy remains largely unexplored. This study looks to bridge psychotherapy thinking and theory with virtual reality. A hermeneutic phenomenological review of the literature is undertaken to explore the links between Winnicott’s ideas of potential space and the concept of virtual space in VR. The study finds that Winnicott’s ideas of infant development and the potential space cross over with the key concepts of immersion and presence in virtual reality. It proposes that our understanding of VR may be furthered by seeing how virtual reality mimics human development through processes such as integration, personalisation, object relations and holding environments. This challenges the belief that technology is interrupting intimate human connection and instead asks the question, what is being reflected back to us through our own technology.