Virtual reality (VR) technology has emerged as a promising tool for studying and rehabilitating gait and balance impairments in people with Parkinson disease (PD) as it allows users to be engaged in an enriched and highly individualized complex environment. This Review examines the rationale and evidence for using VR in the assessment and rehabilitation of people with PD, makes recommendations for future research and discusses the use of VR in the clinic. In the assessment of people with PD, VR has been used to manipulate environments to enhance study of the behavioural and neural underpinnings of gait and balance, improving understanding of the motor-cognitive neural circuitry involved. Despite suggestions that VR can provide rehabilitation that is more effective and less labour intensive than non-VR rehabilitation, little evidence exists to date to support these claims. Nevertheless, much unrealized potential exists for the use of VR to provide personalized assessment and rehabilitation that optimizes motor learning in both the clinic and home environments and adapts to changes in individuals over time. Design of such systems will require collaboration between all stakeholders to maximize useability, engagement, safety and effectiveness.