Background: When it comes to rehabilitation following many injuries and disabilities, exercise therapy is a long, arduous, and tedious process. Therefore, there is a need to employ new methods to increase the frequency, duration, and intensity of the exercises, and to boost motivation and satisfaction of the patients in a way that they can better perform the exercises. In this regard, virtual reality (VR) is an emerging technology that can be an effective tool in mitigating therapeutic challenges. Objectives: The main objective of the current study was to evaluate the effectiveness of VR-based exercise therapy to highlight areas for future studies in rehabilitation. Methods: The scoping review methodology was used to comprehensively search for and identify related papers in MEDLINE (PubMed), Cochrane Database of Systematic Reviews, EMBASE, IEEE, and Web of Science, while grey literature was also searched. Studies that used VR for exercise therapy were included in the current review. Quality assessment was performed using the Physiotherapy Evidence Database. The consensus was reached following two reviewers’ independent inclusion screening, data extraction, and appraisal. Results: Among 2887 identified studies, 26 papers were eligible to be included in this review. The results showed the positive effects of VR-based exercise therapy in a variety of conditions or disorders. With regard to treatment objectives, VR-based exercise therapy has been more commonly considered for the improvement of pain (41%), functional ability (31%), and muscular strength (24%). According to the findings, compared to other VR devices, Nintendo Wii and Kinect are 41% and 24% more common, respectively. Conclusions: This review provides evidence for the potential effectiveness of virtual reality-based exercise therapy for the improvement of rehabilitation outcomes. However, further higher-quality research is needed to confirm the observed positive effects