In recent years, psychologists have been exploring the impacts of virtual reality on mental health, discovering its potential toward curing diseases and therapeutic tools for many such mental conditions. In conventional exposure therapy, the ability of patients to successfully visualize particular feared stimuli is a prerequisite for imaginal exposures. On the flip side, various VR-related tasks have been conducted to test the impact on dreams. This study examines the impact of VR on dreams and analyze the changes in its patterns. By reviewing the recent papers, we concluded that the potential harm caused by VR is well established, with negative side effects reported since the early 1990s. Seven of these twenty-three studies either did not report global incorporation rates or failed to provide sufficient data to determine them. The side effect profile associated with the clinical use of VR and AR remains largely unknown; therefore, we systematically reviewed available evidence of their adverse effects.