Given the high incidence of brain injury in the population, brain damage rehabilitation is still a relatively undeveloped field. Virtual reality (VR) has the potential to assist current rehabilitation techniques in addressing the impairments, disabilities, and handicaps associated with brain damage. The main focus of much of the exploratory research performed to date has been to investigate the use of VR in the assessment of cognitive abilities, but there is now a trend for more studies to encompass rehabilitation training strategies. This review describes studies that have used VR in the assessment and rehabilitation of specific disabilities resulting from brain injury, including executive dysfunction, memory impairments, spatial ability impairments, attention deficits, and unilateral visual neglect. In addition, it describes studies that have used VR to try to offset some of the handicaps that people experience after brain injury. Finally, a table is included which, although not an exhaustive list of everything that has been published, includes many more studies that are relevant to the use of VR in the assessment and rehabilitation of brain damage. The review concludes that the use of VR in brain damage rehabilitation is expanding dramatically and will become an integral part of cognitive assessment and rehabilitation in the future.