The present investigation aims to identify best practices to design virtual reality (VR) story-worlds to promote prejudice reduction and foster prosocial attitudes toward under-represented groups. Past research shows that VR, which allows the simulation of scenarios that would otherwise be prohibitively difficult or impossible in real life, can be an effective tool for understanding human cognition and researching perception, decision-making, and behavior (Groom, Bailenson, Nass, 2009). In tightly controlled immersive digital simulations, one can inhabit an avatar’s digital body with salient features (different skin color, age, gender, social status) to trigger beliefs, affect, and behaviors different from normal day-to-day life (Bailenson &Yee, 2007). VR perspective-taking experiences focused on imagined intergroup contact with individuals from marginalized groups can increase prosocial behavior toward them (van Loon, Bailenson, Zaki, Bostick, Willer 2018). Intergroup contact theory hypothesizes that reducing anxiety, which is the cause of increased stereotyping against the outgroup, and permeating the social encounter with positive emotions (Miller, Smith, & Mackie, 2004) leads to prejudice mitigation (Pettigrew & Tropp, 2006). Beyond these insights from social psychology, sparse literature has explored how to design immersive story-worlds to instill prosocial attitudes and behaviors, including the effectiveness of employing photorealistic techniques. This research fills this gap and challenges the assumption that human perceptions inside virtual and physical worlds are equal if digital assets are photorealistic. By creating a taxonomy of design strategies for inclusive VR, displaying data gathered during playtesting six state-of-the-art VR experiences, it identifies which affordances and methodologies are significant to inducing compassion and prosocial attitudes in immersive social encounters and contributes a pragmatic approach to the design of VR for bias mitigation while considering the craft, ethical and humanistic dimensions of the medium.