Abstract Virtual reality (VR) is increasingly adopted across various fields, due to its ability to immerse people in virtual environments (VEs) and induce emotions. A key factor in this experience is the sense of presence, which is the feeling of being in the VE and the perceived realism of the experience. While prior research has demonstrated the importance of presence in driving emotional outcomes, gaps remain in understanding how the type of VEs and individual differences may influence this relationship. The present study addressed these gaps by comparing the strength of the relationship between presence and emotional outcomes across fear-inducing and relaxation-inducing VEs. The study also investigated whether this relationship was moderated by individual differences such as trait absorption and neuroticism. 125 participants were randomly assigned to one of two VEs. Participants completed baseline assessments, experienced the VE, then completed post-test assessments. Emotional outcomes were assessed through subjective emotional valence and arousal ratings. Results showed that the relationship between presence and emotional arousal was significantly stronger in the fear-inducing VE than in the relaxation-inducing VE. Furthermore, trait absorption and neuroticism significantly moderated the relationship between presence and emotional valence in only fear-inducing VEs. No moderation effects were found for the relationship between presence and emotional arousal. The study points that the relationship between presence and emotional outcomes is not consistent and may be influenced by the type of VE, trait absorption, and neuroticism. These findings provide theoretical and practical implications for designing effective VEs for various applications.