Objective: We examined motion sickness in an oscillating virtual environment presented via a video projector system. Background: Visible oscillation of the physical environment is known to induce both postural instability and motion sickness, but it cannot be assumed that the same phenomena will occur in a virtual simulation of such motion. Method: Standing participants (3 men and 9 women, 20-22 years of age) were exposed to oscillation of a virtual room. The stimulus was a computer-generated simulation of a laboratory device that is known to induce postural instability and motion sickness. Participants viewed the simulation for up to 40 min and were instructed to discontinue if they experienced symptoms of motion sickness. Results: Motion sickness incidence (42%) did not differ from that in studies using the corresponding physical moving room. Prior to motion sickness onset, the sick group exhibited changes in movement, relative to the well group, as predicted by the postural instability theory of motion sickness. Differences in movement between the sick and well groups developed over time, in contrast with previous studies using physical moving rooms, in which such movement differences have not evolved. Conclusion: The results indicate that changes in postural activity precede motion sickness that is induced by an oscillating virtual environment, but they also reveal differences in postural responses to virtual and physical motion environments. Application: Potential applications of this research include recommendations for the use of virtual environments as models for perception and action in physical environments.