This paper describes and discusses a case study of postgraduate students undertaking accident investigation and risk assessment exercises in an online virtual world as part of their course curriculum. These exercises were constructed to overcome the ethical and practical barriers inherent in real-world exercises. In particular this paper focusses upon the potential of such exercises to facilitate the authentic dimension of situated learning and identifies some of the factors that affect the sense of authenticity in virtual world learning exercises. Thirteen such factors were identified. Nine of those were positive factors that enhanced the sense of authenticity; these were facilitation, presence and authority, visual realism, socialisation, comparative reality, engagement, active learning, generalizability and enabling learning from mistakes. The 4 negative factors which detracted from the sense of authenticity were the public image of virtual worlds, lack of naturalism, unrealistic graphics and lack of tactile sense. (Contains 3 figures and 1 table.)