Background: Virtual reality simulation is a valuable tool in critical care nursing education and can provide an avenue for identifying weaknesses both in individual student performance and in program content. It provides a controlled environment that imitates a real-life patient care setting and allows students to learn, practice, and repeat procedures as often as necessary in order to correct mistakes, master skills, and optimize clinical outcomes. Aim: to determine the effect of using virtual reality simulation versus instructor-led demonstration on nursing students' clinical performance and self-efficacy. Setting: A quasi-experimental, time series posttest design was conducted at the information technology and skill laboratories at Faculty of Nursing, Damanhour University and at the General ICU of Damanhour Chest Hospital. Subjects: comprised of 80 students enrolled in the Critical Care Nursing (I) course and were selected randomly and divided into control and study groups. Tools: Three tools were used. Tool one: "Central Venous Pressure Measurement Check list". Tool two: "Students' Self-efficacy Scale of Central Venous Pressure Measurement". Tool three: "Students' Feedback Questionnaire on Virtual Reality Simulation". Results: revealed that the students in virtual reality simulation group performed better in total CVP measurement than students in the instructor-led demonstration group when they encountered real patients in the fifth week of their clinical rotation as well as, in the follow up in the tenth week of their clinical rotation. The same picture was reflected in students' self-efficacy, where the mean percent score of self-efficacy in the VRS group was higher throughout the study phases than in the I-LD group with the exception of the fifth week of their clinical rotation, when they were nearly equal. Furthermore, the VRS program had a larger effect size than the I-LD in terms of improving students' self-efficacy and clinical performance in measuring central venous pressure. Conclusion: The two methods were found to be effective in learning the CVP measurement procedure. The students reported significant benefits from the VRS program as, it was a very interesting, appealing, and effective program for learning the CVP measurement procedure. It provided them with immediate feedback, enhancing their confidence in performing CVP measurements and assisting them in mastering the skill of measuring CVP. Recommendation: Educational workshops should be conducted for all clinical nurse educators about virtual reality simulation strategy to increase their competencies in applying it, and integrating VRS in clinical learning for critical care nursing students to improve their competencies before their first exposure to patients.