BACKGROUND: Virtual reality (VR) is increasingly used in healthcare education, offering immersive training experiences that are as effective as conventional methods, with benefits like cost-effectiveness, replicating complex scenarios, and reduced need for physical resources. However, the use of VR as an assessment tool is still emerging, particularly in nursing and medical education. The aim of this systematic review was to examine how immersive VR is used as an assessment tool for nursing and medical students. METHODS: Embase, PubMed, PsycINFO, Cochrane, CINAHL, and ERIC were searched for articles that assessed nursing and/or medical students using immersive/HMD VR. The data was extracted, and content analysis was performed. RESULTS: Twenty-six studies met the inclusion criteria, investigating VR assessments in various settings mostly emergencies. Assessments focused on core competencies Patient Care such as first triage, Interpersonal and Communication Skills (e.g., interprofessional communication), and Medical Knowledge (e.g., about coma), utilizing a range of assessment methods from knowledge to performance levels. VR was used either as an automated or supporting assessment tool. Practical considerations in VR implementation were also examined, such as hardware and software. CONCLUSION: The use of VR in medical education assessment shows promise, particularly for emergency scenarios and performance-based tasks related to core competencies such as Patient Care, Interpersonal and Communication Skills, and Medical Knowledge. While this technology offers opportunities to automate assessments and reduce examiner workload, challenges related to software, costs, and feasibility must be addressed. Additionally, aligning learning objectives, teaching methods, and VR assessments through constructive alignment is essential to ensure effective implementation as both a teaching and evaluation tool.