Virtual reality has become an alternative learning method in nursing education, particularly in developed countries, as a solution to issues such as limited practice facilities, patient safety and infection concerns, pandemics, and the cost inefficiencies of modern simulation technology. The use of virtual reality in nursing education in Indonesia is not widespread, even though it could offer a solution to these nursing practice challenges that are also present in Indonesia. The aim of this review is to investigate the effectiveness of using virtual reality in nursing education simulations on nursing student competence, assessed in terms of knowledge, self-efficacy, learning satisfaction, clinical reasoning abilities, as well as skills and performance. This literature review selected 10 articles from the Scopus and Ebsco databases using the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) approach, with keywords including virtual reality, augmented reality, nursing education, and nursing simulation. From the analysis of the 10 selected articles, it can be concluded that virtual reality is effective in enhancing nursing student competence, as assessed in terms of knowledge, self-efficacy, learning satisfaction, clinical reasoning abilities, as well as skills and performance. The quantity of virtual reality learning repetitions to achieve a significant impact, the significance of differences in hardware used in immersive virtual reality on the resulting impact, and further investigation into the long-term impact of virtual reality are topics that require further research.