This paper describes several new visualization and interaction techniques that enable the use of virtual environments for routine medical purposes. A new volume-rendering method supports shaded and transparent visualization of medical image sequences in real-time with an interactive threshold definition. Based on these rendering algorithms two complementary segmentation approaches offer an intuitive assistance for a wide range of requirements in diagnosis and therapy planning. In addition, a hierarchical data representation for geometric surface descriptions guarantees an optimal use of available hardware resources and prevents inaccurate visualization. The combination of the presented techniques empowers the improved human-machine interface of virtual reality to support every interactive task in medical three-dimensional (3-D) image processing, from visualization of unsegmented data volumes up to the simulation of surgical procedures.