The aim of this study was to examine the feasibility of virtual reality (VR) technology for use by persons with dementia (PWD). Data were obtained directly from six PWD regarding their experiences with a virtual environment (VE) of a large outdoor park. A user-centered method was developed to assess: (a) presence; (b) user inputs; (c) display quality; (d) simulation fidelity; and (e) overall system usability. The extent to which PWD could perform four functional activities in the VE was also investigated (e.g., mailing a letter). In addition, physical and psychological well-being of PWD while interacting with the VE was assessed objectively by recording heart rate during the VR sessions and subjectively with discrete questionnaire items and real-time prompts. Symptom profiles associated with simulator sickness were assessed with an adapted version of the Simulator Sickness Questionnaire. The study found that PWD to some extent experienced presence; perceived that objects were realistic and moved naturally; generally felt in control of the interaction; and demonstrated little difficulty using a joystick for navigation. The study also demonstrated that VR is an appropriate medium for assessing functional behavior within the context of an ecologically valid VE. PWD did not experience any significant increase in symptoms associated with simulator sickness, or detriments to their psychological and physical well-being. These findings demonstrated that it is feasible to work in VEs with PWD.