Virtual reality (VR) is becoming increasingly popular for research because of its capability to transport users to virtual worlds, as well as the ability to enable the illusion of owning a virtual body that represents and synchronizes with the user’s movements. The feeling of ownership of a virtual body can be created through interfacing VR with real time motion tracking to provide virtual body representation. This work presents the development of an integrated VR system with real time tracking and its application in developing a sense of virtual body ownership. The VR system includes real time marker-based motion tracking integration, humanoid modeling, and customized humanoid animation creation. A free and open-source 3D computer graphics middleware called MakeHuman was used for humanoid modeling, was used to develop and render the visual content, and the motion tracking was enabled by a set of 14 optical motion tracking cameras. The virtual environment was delivered using a head-mounted display. The approach was used to enable virtual body ownership where the user could have an interactive and immersive experience in the virtual environment for various research scenarios. The approach will help expand the VR research and development by increasing the understanding of the problems at the intersection of human-computer interaction and VR technologies. A case study was presented to demonstrate the efficacy and merit of this approach.