Technological innovations have enabled physiotherapy to apply new possibilities in the rehabilitation of patients, especially in the use of virtual reality (VR). Although the literature provides several examples of VR applications, benefits, and barriers in physiotherapy, scholars obverse that there is still a dearth of studies that discuss and unify the results and impacts of this emerging technology on patients and physiotherapists. Thus, the aim of this study is to analyze the use of VR within physiotherapy and its impact on rehabilitation outcomes. A systematic literature review based on the PRISMA protocol was applied in this study. After searching on databases, such as Bireme, Cochrane, Emerald, Google Scholar, Lilacs, Medline, PEDro, PubMed, and Science Direct, we found 152 articles that complied with our protocol. The initial period of the search was open up to June 2020. Our results show an increased use of VR in neurology with elderly patients. We have identified underlying barriers (issues implementing VR, lack of protocols, and influence of patients) and benefits (effectiveness of treatment, motor development, and patient independence) of VR implementation. Finally, our study provides implications for VR in physiotherapy: a prominent increase in the use of VR in rehabilitation; value co-creation: interactions between patients and physiotherapists are crucial in the use of VR in physiotherapy; barriers related to technology, applicability, and the patient’s influence need to be overcome for VR practice to be used as a ‘business as usual’ modality in physiotherapy; the benefits of VR treatment can overcome the barriers faced by its use in rehabilitation.