Virtual reality (VR) based stress therapy system refers to a system that applies virtual reality technology in a stress therapy session aiming to reduce mental stress. Previous studies conducted found that the system is effective in reducing stress. However, most of the studies done only aimed to measure the effectiveness of the system in reducing stress without having a guideline on how to design the virtual environment. Therefore, this paper aim to identify potential factors and its elements that must be considered when designing a virtual environment for a VR- based stress therapy application. Systematic literature review technique was employed as a guideline to search for relevant studies. The search was conducted using pre-defined keywords. Potential studies were filtered three times before it was finalised. After the selection process, the chosen studies were reviewed and important data that answers this study’s two research questions were extracted for analysis purposes. Ten studies were found to fulfil the inclusion criteria and answer all the research questions. From the review conducted, four factors were identified as aspects that should be considered when designing a virtual environment for a VR-based stress therapy application. In addition, each factor consisted of several elements.