Aim: The aim of the present study was to assess the effectiveness of virtual reality distraction on pain perception and state anxiety levels undergoing restorative treatment in children. Materials and methods: This was an interventional study with 30 children of age 6–10 years came to the Department of Pedodontics and Preventive Dentistry. The intervention was distraction with virtual reality eyeglasses and the parameters considered includes pain perception analyzed subjectively by Wong Baker FACES pain rating scale and objectively by FLACC scale; anxiety was analyzed physiologically by measuring pulse rate and oxygen saturation levels using pulse oximeter. The parameters were recorded before the treatment, i.e., baseline, during and as well as after the restorative treatment procedure. The values noted were tabulated and subjected to appropriate statistical analysis with p value set at 0.05. Results: The study displayed a very high statistical significance in reduction of pain perception and anxiety levels in all the comparisons made at three time periods, i.e., baseline, during and after treatment procedure (p < 0.0001). Conclusion: Virtual reality distraction can be considered as a budding distraction tool in the arena of behavior management that helps adapt the child to dental environment and able to deliver qualitative dental care. Clinical significance: Managing an anxious child is one of the challenging tasks for a pediatric dentist in the day-to-day life. As the world progresses with newer interventions, virtual reality distraction is one among them that has the ability to reduce pain perception and anxiety in children with a positive approach.