Acrophobia, or fear of heights, is a widespread and debilitating anxiety disorder affecting perhaps 1 in 20 adults. Virtual reality (VR) technology has been used in the psychological treatment of acrophobia since 1995, and has come to dominate the treatment of numerous anxiety disorders. It is now known that virtual reality exposure therapy (VRET) regimens are highly effective for acrophobia treatment. This paper reviews current theoretical understanding of acrophobia as well as the evolution of its common treatments from the traditional exposure therapies to the most recent virtually guided ones. In particular, the review focuses on recent innovations in the use of VR technology and discusses the benefits it may offer for examining the underlying causes of the disorder, allowing for the systematic assessment of interrelated factors such as the visual, vestibular and postural control systems.