The goal of the present review is to explain how immersive virtual environment technology (IVET) can be used for the study of social interactions and how the use of virtual humans in immersive virtual environments can advance research and application in many different fields. Researchers studying individual differences in social interactions are typically interested in keeping the behavior and the appearance of the interaction partner constant across participants. With IVET researchers have full control over the interaction partners, can standardize them while still keeping the simulation realistic. Virtual simulations are valid: growing evidence shows that indeed studies conducted with IVET can replicate some well-known findings of social psychology. Moreover, IVET allows researchers to subtly manipulate characteristics of the environment (e.g., visual cues to prime participants) or of the social partner (e.g., his/her race) to investigate their influences on participants’ behavior and cognition. Furthermore, manipulations that would be difficult or impossible in real life (e.g., changing participants’ height) can be easily obtained with IVET. Beside the advantages for theoretical research, we explore the most recent training and clinical applications of IVET, its integration with other technologies (e.g., social sensing) and future challenges for researchers (e.g., making the communication between virtual humans and participants smoother).