Previous research suggests that the effectiveness of virtual reality exposure therapy should increase as the experience becomes more immersive. However, the neural mechanisms underlying the experience of immersion are not yet well understood. To address this question, neural activity during exposure to two virtual worlds was measured by functional magnetic resonance imaging (fMRI). Two levels of immersion were used: unimodal (video only) and multimodal (video plus audio). The results indicated increased activity in both auditory and visual sensory cortices during multimodal presentation. Additionally, multimodal presentation elicited increased activity in the hippocampus, a region well known to be involved in learning and memory. The implications of this finding for exposure therapy are discussed.