Virtual reality (VR) describes a family of technologies which immerse users in sensorily-stimulating virtual environments. Such technologies have increasingly found applications in the treatment of neurological and mental health disorders. Depression, anxiety, and other mood abnormalities are of concern in the growing elderly population – especially those who reside in long-term care facilities (LTCFs). The transition from the familiar home environment to the foreign LTCF introduces a number of stressors that can precipitate depression. However, recent studies reveal that VR therapy (VRT) can promote positive emotionality and improve cognitive abilities in the elderly, both at home and in LTCFs. VR thus holds potential in allowing elderly individuals to gradually adapt to their new environments – thereby mitigating the detrimental effects of place attachment and social exclusion. Nevertheless, while the current psychological literature is promising, the implementation of VR in LTCFs faces many challenges. LTCF residents must gain trust in VR technologies, care providers require training to maximize the positive effects of VRT, and decision makers must evaluate both the opportunities and obstacles in adopting VR. Here, we concisely review the implications of depression related to place attachment in LTCFs, and explore the potential therapeutic applications of VR.