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According to the licensing effect (Miller & Effron, 2010), eliciting a desirable behavior in one domain may paradoxically lead to transgressions in another. When people feel they earn moral credits doing good deeds, these credits may then license bad behavior. Using a 2 (immersion) x 2 (virtual rewards) design, the current experiment aimed to explore whether a good deed in the virtual world would encourage participants to transgress in the physical world. After performing a virtual good deed in one domain (pro-environmental behavior), participants had the opportunity to transgress in a different domain (diet) by eating candy. Engaging in a virtual good deed in a highly immersive virtual environment and receiving virtual rewards led individuals to perceive the highest levels of psychological licensing and feel that they have earned the most moral credits. These credits helped lower their inhibitions about transgressions and led them to indulge in eating more candy than participants in the other conditions.