Traumatic brain injury (TBI) is a common neurological disorder that leads to various cognitive, motor, and emotional impairments. Although conventional rehabilitation approaches offer partial symptom relief, they often fall short in task diversity, feedback mechanisms, and ecological validity. In recent years, virtual reality (VR) technology has emerged as a valuable adjunct in TBI rehabilitation due to its immersive and interactive features. Emerging evidence highlights its unique advantages in enhancing patient engagement and establishing multifunctional training systems. This review systematically examines the clinical applications and underlying mechanisms of VR in TBI rehabilitation, with a particular focus on its potential physiological foundations, including neural plasticity remodeling, multisensory integration, mirror neuron activation, and motivational feedback modulation. The aim is to provide theoretical insights and practical guidance for the optimized implementation and clinical translation of VR-based rehabilitation strategies.