An important goal in rehabilitation engineering is to develop technology that allows individuals with severe motor impairment to practice arm movement without continuous supervision from a rehabilitation therapist. This paper describes the development of such a system, called Therapy WREX or ("T-WREX"). The system consists of an orthosis that assists in arm movement across a large workspace, a grip sensor that detects hand grip pressure, and software that simulates functional activities. The arm orthosis is an instrumented, adult-sized version of the Wilmington Robotic Exoskeleton (WREX), which is a five degrees-of-freedom mechanism that passively counterbalances the weight of the arm using elastic bands. After providing a detailed design description of T-WREX, this paper describes two pilot studies of the system's capabilities. The first study demonstrated that individuals with chronic stroke whose arm function is compromised in a normal gravity environment can perform reaching and drawing movements while using T-WREX. The second study demonstrated that exercising the affected arm of five people with chronic stroke with T-WREX over an eight week period improved unassisted movement ability (mean change in Fugl-Meyer score was 5 points +/- 2 SD; mean change in range of motion of reaching was 10%, p < 0.001). These results demonstrate the feasibility of automating upper-extremity rehabilitation therapy for people with severe stroke using passive gravity assistance, a grip sensor, and simple virtual reality software.