Virtual reality has been suggested as a tool for treating different anxiety disorders. Specific phobia, the fear of a distinct object or situation, is a common disorder affecting many people at some point of their life. Traditionally, specific phobia is treated with exposure-based treatment. Virtual reality may present an alternative for the treatment. Virtual reality exposure therapy uses virtual reality technology to provide the necessary exposure for the phobic patient in a virtual environment. Virtual reality can provide a strong sense of immersion, the sense of being part of the virtual world, which is important for the exposure treatment. This thesis, implemented as a literature review, aims to find the treatment response to virtual reality technology in specific phobia treatment and to point out its benefits and limitations to the treatment. Based on the literature, the use of virtual reality technology yields for a positive treatment outcome and results in a positive treatment response. A head-mounted display is an important technology used in the treatment as it supplies a medium for the sense of immersion. Immersion can be further enhanced by stimulating the different senses of the user. Virtual reality provides a cost-efficient treatment approach that is easy to administer and modify to the needs of the patient. However, undesirable physical and psychological symptoms may arise with the use of virtual reality. Furthermore, ethical and safety concerns exist.