This course aims to equip students with the fundamental principles and techniques to design and create virtual world environments which are suitable for virtual and augment reality, games, and storytelling applications. Virtual world is a self-contained, persistence computer simulated environment in which player can inhibit, navigate and interact with non-player characters, and even communicate with other players in the case of multi-users shared and networked environment. On the theoretical side, student will first acquire a comprehensive overview of the historical development of virtual worlds from the early days of text-based virtual world to the contemporary graphic-intensive real-time interaction virtual environment. Besides, student will be introduced to the design principles and theories related to the different aspects of player's cognition and perception of the virtual environmental. On the practical side, student will learn the essential techniques and skills to create an engaging and dynamic virtual environment with physical simulations, intelligent responses and real-time interactions. After finishing this course, student will be able to design and formulate a basic virtual world framework from which creative works such as virtual reality, augmented reality and games can be further developed.