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Virtual reality plays an increasingly important role in research and therapy of pathological fear. However, the mechanisms how virtual environments elicit and modify fear responses are not yet fully understood. Presence, a psychological construct referring to the ‘sense of being there’ in a virtual environment, is widely assumed to crucially influence the strength of the elicited fear responses, however, causality is still under debate. The present study is the first that experimentally manipulated both variables to unravel the causal link between presence and fear responses. Height-fearful participants (N = 49) were immersed into a virtual height situation and a neutral control situation (fear manipulation) with either high versus low sensory realism (presence manipulation). Ratings of presence and verbal and physiological (skin conductance, heart rate) fear responses were recorded. Results revealed an effect of the fear manipulation on presence, i.e., higher presence ratings in the height situation compared to the neutral control situation, but no effect of the presence manipulation on fear responses. However, the presence ratings during the first exposure to the high quality neutral environment were predictive of later fear responses in the height situation. Our findings support the hypothesis that experiencing emotional responses in a virtual environment leads to a stronger feeling of being there, i.e., increase presence. In contrast, the effects of presence on fear seem to be more complex: on the one hand, increased presence due to the quality of the virtual environment did not influence fear; on the other hand, presence variability that likely stemmed from differences in user characteristics did predict later fear responses. These findings underscore the importance of user characteristics in the emergence of presence.