Virtual Reality (VR) is currently the subject of much academic research and virtual environments, particularly in the form of 3D computer games, are the subject of much commercial activity. However, the development process for VEs is not well documented or fully researched. In this paper the available literature relating to VE design is briefly reviewed prior to the presentation of a possible design methodology for VEs. The paper then goes on to discuss the weak points in the methodology and problems with inter-relating the various stages. Finally, future areas of research are identified.